NPS stands for National Pension Scheme. It is a voluntary retirement saving scheme launched by the Government of India. NPS promotes systematic savings across working life, so that you have a huge corpus at retirement.
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How To Open NPS Account?
Eligibility criteria for NPS:
- Individual must be aged between 18 to 60 years.
- Subscriber should be Know Your Customer (KYC) compliant
- Government subscribers who are mandatorily covered under NPS are not eligible.
See Also: NPS Contribution
Conditions on contribution to NPS:
- Minimum contribution should be Rs 6,000 a year.
- Amount can be made in a single installment/lump sum or in installments of a minimum of Rs 500 each month.
- There is no maximum limit for contribution to NPS.
- NPS can be withdrawn only at the age of 60.
How to open an NPS account?
You can open an NPS account in two ways:
- By visiting POP-SP
- Online through eNPS
1. By visiting POP-SP:
Any Indian citizen aged 18 to 65 years can open an NPS account. They can visit any Points Of Presence – Service Providers.
- Get a Permanent Retirement Account Number (PRAN) application form from any Point of Presence - Service Providers (POP-SP) or from the NSDL website. The link is: https://www.npscra.nsdl.co.in/steps-to-join-nps.php.
- Fill the PRAN application form, submit a photograph and submit the duly filled PRAN application form to your nearest POP-SP.
- Submit KYC documents like identity, address proof along with the application form.
- A minimum amount of Rs 500 is to be paid at the time of application. Submit NCIS (instruction slip) mentioning the details of your payment.
- Central Recordkeeping Agency (CRA/eNPS) will send the PRAN card to your permanent address.
- You can track the status of your PRAN application by entering your receipt number given in https://cra-nsdl.com/CRA/pranCardStatusInput.do.
2. Online through eNPS:
There are two ways of opening an NPS account online through eNPS:
Option 1: Registration using Aadhaar
- An applicant must have an ‘Aadhaar number’ and a mobile number registered with Aadhaar for KYC purposes. OTP will be sent to the mobile number registered with Aadhaar.
- Your photo and demographic details will be fetched from the Aadhaar database and populated in the online form.
- Fill up the mandatory details online.
- Upload your scanned signature in .jpeg/.jpg format. The file size should be between 4KB – 12KB.
- On being routed through a payment gateway, make the payment towards NPS account through Debit Card, Credit Card and Internet Banking.
Option 2: Registration using PAN
- For this option, you must compulsorily have a Permanent Account Number (PAN).
- Select a bank where you have an account among the list of empanelled banks for KYC verification.
- The bank does the KYC verification.
- Details like name and address provided during registration, should match with bank records.
- Fill all mandatory details online. Upload scanned photograph and signature in .jpeg/.jpg format with file size between 4KB – 12KB.
- On being routed through a payment gateway, make the payment towards your NPS account through Internet Banking.
SEE ALSO: Types Of Investment Plans
- Select your Bank Account Status, whether Non-Repatriable or Repatriable.
- Provide your NRE or NRO bank account details.
- Upload the scanned copy of your passport.
- Select the address for communication; this could be an overseas address or permanent address.
- After a Permanent Retirement Account Number (PRAN) is allotted, a subscriber can:
Option 1: eSign
Tier I PRANs generated through Aadhaar can eSign the document by
- Selecting the 'eSign' option in the eSign/Print and courier page.
- You will receive an OTP on your mobile number registered with the Aadhaar.
- After authentication, the registration form will be eSigned.
Option 2: Print and Courier
- Select 'Print & Courier' option in the eSign/print and Courier page.
- Take a printout of the form, paste your photograph, and sign (not sign across the photograph) in the space provided for the signature.
- Send the form within 90 days from the date of allotment of PRAN to CRA at:
Central Recordkeeping Agency (eNPS)
NSDL e-Governance Infrastructure Limited,
1st Floor, Times Tower, Kamala Mills Compound,
Senapati Bapat Marg Lower Parel, Mumbai - 400 013
Failure to send the form within the prescribed time will freeze your PRAN temporarily.
Documents required for National Pension Scheme (NPS):
- Identity proof
- Residential proof
- Application form
- Original documents for verification
Advantages of investing in National Pension Scheme (NPS):
- Fund management fee for NPS is charged at a negligible amount of 0.1%.
- An investment as low as Rs 6,000 can be made in NPS per year.
- Investment in NPS can be done online. You can track the performance of your funds through the e-NPS portal.
- You can claim a tax deduction towards contribution made to NPS up to Rs 50,000 a year under Section 80CCD(1B).
- Up to 40% of the corpus withdrawn at the time of retirement is exempt from tax.
- Subscribers have to compulsorily invest 40% of the corpus in Pension Annuity Scheme. This gives you security in retirement and provides a pension.
See Also: Income Tax Rules for Fy 2018-19
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