National Pension System (NPS) is one of the best retirement schemes in India. It provides an additional deduction of Rs 50,000 under section 80CCD (1B).
Hence, it can help you maximise your tax benefits. Any individual can open a pension account under NPS through eNPS.
The National Pension System is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
It is mandatory to have an Aadhaar card for opening an NPS account. Also, the KYC is done via OTP authentication from your registered mobile number linked with your Aadhaar.
The NPS, which matures at the age of 60, can be extended until the age of 70. Although, you can only withdraw 60% of the accumulated corpus at the time of maturity. It is mandatory to invest the rest of 40% of the corpus in the annuity.
Who can apply for NPS?
Citizens between the ages of 18 and 65 years at the time of application can open an NPS account, both Tier-I (with withdrawal limitations) as well as Tier-II (no withdrawals limit)
READ | 7th Pay Commission: BIG news for central employees as DA hiked by 3%, check calculation here
Types of accounts
1. Tier I is the mandatory account for long-term savings.
2. Tier II is an add-on account that provides you with the flexibility to invest and withdraw from various schemes available in NPS without any exit load.
Here's how to open an NPS account:
Step 1: Visit the NSDL portal and click on the registration
Step 2: An OTP will be sent to your registered mobile number after entering your Aadhaar or PAN details.
Step 3: Then choose the type of account you want to open.
Step 4: Choose the Aadhaar as your identity document to complete the process entirely online.
Step 5: Now fill in your personal details and click submit to generate your acknowledgement number.
Step 6: Choose from any seven pension funds which is a crucial part. You also have to choose the investment mode and assign your nominees.
Step 7: Then upload the photograph and signature and make the payment.
Step 8: A Permanent Retirement Account Number (PRAN) will be allotted to you.
Finally, download the form and get a printout.
