PFRDA fixes new charge structure for NPS and NPS Lite Points of Presence — what subscribers will pay their agent

On 28 August 2026 the Pension Fund Regulatory and Development Authority issued circular PFRDA/2026/46/REG-POP/08, titled "Charge structure applicable to PoPs for All Schemes under NPS and NPS Lite". It rewrites what the intermediary you deal with — the Point of Presence, or PoP — may charge you, and it takes effect from 1 October 2026. The old fee card, set by circular PFRDA/2026/16/REG-POP/01 of 10 March 2026, stands superseded from that date.

For anyone building a retirement corpus inside the National Pension System, the practical question is no longer only "which fund manager" but "which route". Under the new structure, how you onboard and how you contribute decide whether you pay the PoP anything at all. This piece sets out the verified numbers from the circular, the tax treatment that applies when you finally draw the money, and a worked drawdown that compares the PoP route against the e-NPS and D-Remit route on a single NPS account.

The Scheme Explained

The National Pension System is a defined-contribution retirement account regulated under the Pension Fund Regulatory and Development Authority Act, 2013. You hold a Permanent Retirement Account Number (PRAN), your money is invested across equity, corporate debt and government securities by a chosen pension fund, and a Central Recordkeeping Agency (CRA) maintains the ledger. The PoP is the front-office intermediary that registers you and routes your contributions. For a plain-English primer, see Oquilia's NPS glossary entry.

Circular PFRDA/2026/46/REG-POP/08 collapses the earlier distinction between "Common Schemes" and schemes started under the Multiple Scheme Framework, and sets one charge card for all schemes under NPS and NPS Lite from 1 October 2026. The two headline heads are a one-time onboarding charge and an annual charge, summarised below.

Source: PFRDA circular PFRDA/2026/46/REG-POP/08, dated 28 August 2026. Goods and Services Tax or other taxes apply in addition to the figures above. A dormant account — defined in the circular as an account identified by a unique PAN across all CRAs with no contribution for four consecutive quarters after a contribution — is not charged the annual fee.

Two contribution floors sit alongside the charges. Under paragraph 4 of the circular, the minimum contribution is Rs 250 at the time of onboarding and Rs 10 for each subsequent contribution for subscribers under NPS. The Central Recordkeeping Agencies will begin deducting charges on this new basis from the third quarter of financial year 2026-27, that is from the October-December 2026 quarter onwards.

The single most consequential line is paragraph 5. A subscriber onboarded through e-NPS who then contributes through e-NPS or D-Remit is not liable to pay any PoP charge. But a subscriber onboarded through a PoP who later switches to e-NPS or D-Remit remains liable to pay the PoP charges prescribed above. The onboarding channel, fixed once, follows the account for life, so the first decision a subscriber makes in 2026 outlasts every contribution that follows it.

It is worth anchoring NPS against the guaranteed-return schemes a retiree runs beside it, because the 0.20% AUM charge is a drag the fixed-rate options do not carry. For the July-September 2026 quarter the Public Provident Fund pays 7.1%, the Senior Citizens' Savings Scheme pays 8.2%, and the Employees' Provident Fund rate declared for FY 2025-26 is 8.25%. Those three are flat credited rates with no AUM-based intermediary fee, whereas NPS layers a market return against a 0.20% annual PoP charge; you can model an NPS accumulation against them using the NPS calculator.

Tax on Withdrawal

NPS tax treatment turns on three sections of the Income-tax Act, 1961, and none of them moved with the PoP charge circular of 28 August 2026. The lump sum you take at exit is exempt under section 10(12A) only "to the extent it does not exceed sixty per cent of the total amount payable" — the 60% ceiling that has applied since 1 April 2020, verifiable at incometax.gov.in. The balance that must be used to buy an annuity is not taxed at purchase; the pension it later pays is taxed at your slab rate in the year of receipt, the same way any annuity income is treated.

A critical divergence opened on 19 December 2025 and has not closed. Under the PFRDA (Exits and Withdrawals under the NPS) (Amendment) Regulations, 2025, a non-government subscriber may now withdraw up to 80% of the corpus as a lump sum, with a minimum of 20% going to annuity. But section 10(12A) still exempts only 60%. So on a large corpus you may withdraw a larger slice than the Income-tax Act expressly exempts; the treatment of the 60%-to-80% band does not follow automatically from 10(12A), and a subscriber should confirm it before relying on full exemption. The 80/20 limit applies to the non-government sector only. For the government sector the exit split is unchanged at a 60% lump sum and a 40% annuity, and NPS Lite is likewise unchanged at 60% lump sum and 40% annuity, so the 20-point gap does not arise for government-sector or NPS Lite subscribers.

Partial withdrawals are cleaner. Section 10(12B) exempts up to 25% of the subscriber's own contributions, excluding the employer share and investment returns, and that 25% matches the PFRDA withdrawal ceiling, so the amount you may take and the amount exempted coincide. The 2025 regulations allow such a partial withdrawal after three years in the scheme, up to four times before age 60.

On the deduction side, the self-contribution incentive under section 80CCD(1B) — up to Rs 50,000 over and above the section 80C limit — is available only under the old tax regime. It is not available in the new regime. For FY 2025-26 the new regime carries a standard deduction of Rs 75,000 for salaried subscribers, a section 87A rebate of up to Rs 60,000 for total income up to Rs 12 lakh, and a top surcharge capped at 25%. These matter when you decide which regime to draw your taxable annuity income under.

Worked Drawdown

Consider Meera, who turns 60 in October 2026 with a non-government NPS corpus of Rs 1 crore. Her exit choices follow the amended 2025 rules: she may take up to 80%, or Rs 80 lakh, as a lump sum, and must annuitise at least 20%, or Rs 20 lakh. Of the Rs 80 lakh she withdraws, section 10(12A) covers 60% of the corpus — Rs 60 lakh — as exempt; the Rs 20 lakh above that 60% ceiling is the slice she must confirm the treatment of before assuming it is tax-free. Her Rs 20 lakh annuity buys a pension taxed at slab rates each year. To weigh an annuity against drawing the corpus down yourself, compare the two in the annuity vs SWP calculator, and model the depletion path in the retirement drawdown calculator.

The newer question the August 2026 circular forces is what the PoP charge costs Meera across the accumulation years that built that Rs 1 crore. The annual charge is 0.20% of AUM, so it scales with the corpus. The table below shows the annual PoP charge at four AUM levels, computed directly from the 0.20% rate; applicable GST is additional in every case.

Now the route comparison, which is where the circular changes behaviour. Take two subscribers with identical NPS accounts and an identical Rs 50 lakh AUM in a given year:

• Route A — onboarded through e-NPS, contributing through e-NPS or D-Remit. Under paragraph 5, this subscriber is not liable to pay any PoP charge: Rs 0 onboarding and Rs 0 annual charge.
• Route B — onboarded through a PoP. This subscriber pays the Rs 200 one-time onboarding (or Rs 100 if the onboarding was fully digital and non-face-to-face), plus 0.20% of AUM each year — Rs 10,000 on a Rs 50 lakh AUM — plus applicable GST, and continues to pay it even after switching contributions to D-Remit.

The one-time onboarding gap is trivial — at most Rs 200. The recurring 0.20% AUM charge is the real divergence, because it is levied every year on a corpus that is meant to grow for decades. On a Rs 50 lakh AUM that is Rs 10,000 a year before GST; on the Rs 1 crore Meera retires with, Rs 20,000 a year. A subscriber who values a PoP's hand-holding at registration can still capture most of the saving by onboarding digitally and then contributing through D-Remit, but the annual charge does not disappear for them — only an e-NPS onboarding removes it entirely. The corpus that reaches your annuity and lump sum at 60 is the accumulation total net of exactly this 0.20% drag.

The behavioural takeaway is narrow and verifiable: the channel you choose at the very first step decides whether 0.20% of your retirement AUM leaves the account every year for the rest of your working life. For subscribers comfortable transacting online, the circular dated 28 August 2026 makes the zero-charge e-NPS route the cheaper path by a margin that compounds with the corpus, while the Rs 250 onboarding floor and Rs 10 subsequent floor keep the account open on either route.

FAQ

What exactly does a PoP charge from 1 October 2026?

Under circular PFRDA/2026/46/REG-POP/08, a PoP charges a one-time onboarding fee of Rs 200 per PRAN, reduced to Rs 100 for fully digital, non-face-to-face onboarding, and an annual charge of 0.20% per annum of assets under management. Goods and Services Tax or other applicable taxes are added on top, and dormant accounts are not charged the annual fee.

Can I avoid PoP charges altogether?

Yes, but only by onboarding through e-NPS and then contributing through e-NPS or D-Remit. Paragraph 5 of the circular dated 28 August 2026 states such subscribers are not liable to pay any PoP charge. If you onboard through a PoP and later switch to e-NPS or D-Remit, you remain liable to pay the prescribed PoP charges.

When does the new charge structure start being deducted?

The circular takes effect from 1 October 2026. Central Recordkeeping Agencies will implement the deduction of charges on this basis from the third quarter of financial year 2026-27, that is the October-December 2026 quarter onwards, per paragraph 9 of the circular.

Does the circular change how much of my NPS I can withdraw tax-free?

No. The PoP circular of 28 August 2026 is about fees, not withdrawals. The withdrawal rules come from the PFRDA (Exits and Withdrawals under the NPS) (Amendment) Regulations, 2025, which let non-government subscribers take up to 80% as a lump sum. Tax exemption under section 10(12A) of the Income-tax Act still caps at 60% of the total amount payable.

What is the minimum contribution to keep an NPS account active?

The circular sets a minimum contribution of Rs 250 at onboarding and Rs 10 for each subsequent contribution for NPS subscribers. An account identified by a unique PAN across all CRAs with no contribution for four consecutive quarters is treated as dormant and is not charged the annual fee.

Is the section 80CCD(1B) deduction available if I pay no PoP charge?

The two are unrelated. The additional deduction of up to Rs 50,000 under section 80CCD(1B) depends on your tax regime, not your PoP route — it is available only under the old tax regime and not under the new regime, regardless of how you onboard or contribute.

Does the 0.20% annual charge apply to NPS Lite too?

Yes. The circular dated 28 August 2026 applies to all schemes under NPS and NPS Lite from 1 October 2026 and removes the earlier distinction between Common Schemes and schemes started under the Multiple Scheme Framework. Charges for "4A Schemes" are governed separately by their own guidelines.