The government of India created and launched a pension scheme called the National Pension Scheme for Traders and Self-Employed Persons. It is a social security scheme, especially designed for self-employed people engaged in various types of small business activities, including trading. As it is a pension scheme, its main objective is to secure the financial aspects of people’s lives after they reach the age of 60 years. All those enrolled in this scheme are entitled to receive a fixed monthly pension to live and lead comfortable lives without being dependent on anyone.
The contributions made toward the pension fund under this scheme are made by both the people themselves and the central government. This feature makes the scheme run efficiently without being a monetary burden for either of the sides.
Read the article to learn more about the government pension scheme, ranging from its meaning and benefits to eligibility criteria and application process, including information on tax benefits.
Overview
The table below summarises some key details about the PM Laghu Vyapari Maandhan Yojana that one should know.
| Name of the scheme | National Pension Scheme for Traders and Self-Employed Persons |
|---|
| Launched by | Government of India |
| Under | Ministry of Labour and Employment and the Life Insurance Corporation of India |
| Objective | To provide a monthly pension to the beneficiaries after they attain the age of 60 years |
| Target group | Self-employed shop owners |
| Amount of the monthly pension | Rs. 3000 per month |
| How to apply for PM Laghu Vyapari Maandhan Yojana? | Through offline measures |
Read More: Comparing India’s Pension Schemes- Delving Into The Differences Between OPS, NPS, & The New UPS
What Is The National Pension Scheme For Traders And Self Employed Persons?
The National Pension Scheme for Traders and Self-Employed Persons is a government pension scheme launched by the Ministry of Labour and Employment and managed by the Life Insurance Corporation (LIC) of India. One of the factors that makes it stand out from other government pension schemes is that it is especially for traders and other self-employed people owning various types of small business units.
The primary aim of this scheme is to provide a financial security net to the beneficiaries, which will safeguard their life post retirement. i.e., after 60 years. After enrolling in this scheme, all the registered individuals are required to contribute a set amount toward the pension fund every month, and a set amount is contributed by the central government as well. The amount of contributions is decided based on the age of the beneficiary and usually ranges from Rs. 55 to Rs. 200, which makes the scheme very affordable and practical for many.
Objectives Of The NPS For Small Traders & Self-Employed Pension Scheme India
There are several objectives of the government pension for self-employed and the Traders Pension Scheme 2026 that make it unique and beneficial. Some of the key objectives of the scheme are laid down below:
-
The primary objective of the government pension scheme is to provide a financially secure retirement option to almost all self-employed individuals or traders so that they don’t have to worry about the financial security of their future selves.
-
It is one of the targets of the government to cover over three crore small retailers, traders, and other self-employed individuals under this pension yojana.
-
Another key objective of this scheme is to bring people from the unorganised and small business sector into a formal social security system where they can enjoy the same benefits that people from the corporate sector or formal sector do.
Benefits Of The NPS For Small Traders & Self-Employed Pension Scheme India
The government pension for self-employed and the Traders Pension Scheme 2026 come along with several benefits that are described below in brief points:
-
One of the major benefits of this government scheme is that all the beneficiaries under it will be entitled to receive a monthly pension worth Rs. 3000 after they attain the age of 60 years. This pension will not only help them become financially independent but will also empower them.
-
The contributions made through this govt scheme are not a burden for either of the parties involved, as both the employee and the central government make deposits of a predecided sum of money toward one’s pension fund.
-
The monthly pension for small business owners and traders scheme has a provision for family pension, which means that even after the death of the registered beneficiary, their spouse will be able to receive half of the pension amount. This provision removes one of the biggest worries of the beneficiary. i.e., the worry about the future of their family members.
-
The system of payments has been designed extremely carefully. As the scheme needs a beneficiary to link their bank accounts, monthly contributions are automatically debited from their accounts toward the pension fund. This eliminates any issues or chances of missed deposits.
Read More: Top 10 Government Pension Schemes In India
What Is The Eligibility Criteria For The NPS For Small Traders & Self-Employed Pension Scheme India
Individuals are required to comply with all the eligibility criteria to apply for the state govt scheme. The criteria of eligibility for traders pension scheme in India are as follows:
-
Applicants must be between the ages of 18 to 40 years when applying for the scheme.
-
Applicants should own their own retail shop.
-
The business entity’s annual turnover should not be more than Rs. 1.5 crore.
-
Individuals must have an Aadhaar card, a savings account, or a Jan Dhan account with a proper IFSC code.
Exclusion Criteria
Some things can make an individual ineligible for this scheme. The exclusion criteria are as follows:
Who Can Become A Part Of the NPS For Small Traders & Self-Employed Pension Scheme India?
Types of people who can become beneficiaries of this government pension scheme are as follows:
How To Apply For The NPS For Small Traders & Self-Employed Pension Scheme India?
One can apply for the monthly pension for small business owners and traders scheme by following an offline procedure. Please note that there is no Vyapari pension yojana apply online process. Let’s look at the steps of the application for better understanding:
Step 1: Please visit the nearest Common Service Centre (CSC).
Step 2: Request the employees working in CSCs to enroll your name in the scheme. You will be required to pay the installment in cash at the centre, after which the upcoming payments will be debited automatically from your bank accounts.
Step 3: The Village Level Entrepreneur (VLE) will verify your details as mentioned in your Aadhaar card. Fill in the required information, such as your bank account details, contact information, details of the family, annual turnover of the small business, and details of the nominee.
Step 4: The system will calculate the amount of your monthly contributions based on your age at the time of enrolling in the scheme. Recheck the details before signing the auto-debit mandate form, which will then be uploaded to the system by the VLE.
Step 5: After successful enrollment in the scheme, a unique Vyapari Pension Account Number (VPAN) will be generated, and a printed Vyapari card will be given to the enrolled beneficiaries.
What Are The Documents Required For Traders Pension Scheme?
Individuals who meet the eligibility criteria for the pension scheme for shopkeepers and traders have to attach some supporting documents. The list of documents is as follows:
Exit And Withdrawal Provisions Of NPS Traders
There are some predetermined rules regarding exiting or making withdrawals from the scheme. The rules are described below in tabular format:
| Situation | Years | Implication |
|---|
| Early exit | Within 10 years | Beneficiary’s contributions, along with interest at savings bank rate, returned |
| Mid-term exit | After 10 years but before attaining the age of 60 years | Contribution plus interest is returned; the interest in this case is much more than the savings bank rate |
| Premature death | Before attaining the age of 60 years | The spouse of the beneficiary can continue contributing to the NPS account |
| Death after retirement | Before 60 years | The spouse of the deceased is entitled to receive a family pension, which is half of the deceased beneficiary’s pension |
| Disability | After crossing the age of 60 years | The spouse of the beneficiary can continue contributing to the NPS account |
Tax Benefits For Traders And Self-Employed Entrepreneurs Under The NPS
If you’re a trader or own a business of your own, you can reap some benefits of the tax section associated with this govt scheme. The sections that you can benefit from are as follows:
-
Section 80CCD(1): This section is specifically for self-employed or salaried people, through which they can claim tax deduction of up to 20% on part of the total 1.5 lakh rupees limit.
-
Section 80CCD(1B): This section is for all the beneficiaries of the National Pension Scheme, through which people can claim a tax deduction of up to Rs. 50,000, in addition to the Rs. 1.5 lakh limit.
Read More: What Is Mukhyamantri Vriddhjan Samman Pension Yojana?
Conclusion
The NPS for Small Traders & Self-Employed Pension Scheme India is much awaited pension scheme, as it covers those who are often overlooked. i.e., self-employed individuals. Social security measures, like pension funds, are not just a need for people working in the organised formal sector, but a need for all those who are working to fend for themselves and their families, irrespective of the sector they work in.
It not only ensures that every beneficiary receives a monthly pension in their retirement years but also gives them a secure and safe way of planning for their futures, specifically financial futures.
Stay updated with Jaagruk Bharat for the latest information on government schemes and more, and reach out to us on our community page if you have any questions.
