In the recent past, the popularity of the NPS or National Pension System has been raised substantially. The reason for it is the multi-faceted benefits associated with it. It offers better tax benefits (i.e. a sum of maximum Rs. 2 lakh invested annually in NPS is entitled to get tax exemption) and better returns, moreover, NPS also has a choice of funds which enable is to stay head all other tax-saving plans.
National Pension System (NPS) offers an ideal solution for planning for retirement. It offers a steady old age income along with a reasonable amount of market returns. The scheme is based on a unique Permanent Retirement Account Number (PRAN) which is given to each and allotted to every NPS account subscriber.
The NPS is largely intensive on the retirement of a person. While up to sixty percent of the maturity corpus can be taken out as a lump sum on maturity, the balance is annuitized compulsorily, i.e., balance is utilized to fund the pension (annuity) after retirement. This annuity is taxable fully in the receipt year as income from other sources.
NPS account is accessible through mobile application also by the name ‘NPS by NSDL e-Gov’. it offers the subscribers to view their NPS account details along with scheme holdings and the latest Net Asset Value (NAV). The app also enables subscribers to view the total value of their schemes. Subscribers can also see the transaction statement for a specific financial year along with the contributions made in the last five times. The subscriber can also switch among various options such as asset classes, fund managers and change the allocation ratio, etc.
The various facilities available on the login account of the subscriber are as follows:
- View profile details
- Transaction Statement
- Statement of Holding
- Contribution Statement
- Transaction through
Benefits of NPS account
The benefits of the NPS account are as follows:
- Exclusive Tax Benefit: It offers Rs.50,000/ as an extra deduction
- Regulated: It is controlled by PFRDA (i.e. Pension fund regulator under Govt. of India)
- Transparency: It is possible to access the account through digital mode for making the contributions and for keeping track of the further developments in the investment.
Who can apply for an NPS Account?
- The person should be an Indian Citizen.
- The age of the person should be between 18 to 65 years.
- The person should not have a pre-existing NPS account.
It is a digital world, where everything is easily accessible at the click of the mouse. So National Pension System Trust has also introduced an online facility which is known as eNPS. It is a convenient way to make the procedure of opening NPS account simpler. The eNPS option offered by the National Pension System Trust permits an individual to open pension accounts in the NPS plan. It helps in contributing initial and succeeding contributions to the Tier I as well as Tier II accounts.
Following are the requirements for opening NPS account online:
- One should have a mobile number, an email id along with an active bank account which has internet banking facility.
- Aadhaar card number with a registered mobile number.
- Scan copies of the photographs and canceled cheques along with the signature image.
- At least RS. 500 in the bank account or the credit card of the person.
Steps to start an NPS online account:
- One should visit eNPS portal i.e. https://enps.nsdl.com/eNPS/NationalPensionSystem.html. After this one should click “registration” option available on the right-hand side on the home page.
- This will open the online subscriber registration page. Here, one should select the new registration option by selecting an appropriate category. Here, one has to enter his/her Aadhaar number which will generate an OTP. One is required to enter the OTP received on the registered mobile number and the continue option has to be clicked.
- Clicking on the “continue” will lead to the generation of an acknowledgment number with the name of the person along with time stamp. It has to be followed by selecting the option of “OK”.
- It will prompt the individual to enter his/her personal details. One needs to verify the personal details after entering them. It has to be followed by clicking on “Save & Proceed” option.
- The next step involves query about the bank details of the person which have online banking facility. Entering of the bank details has to be followed by clicking on the “Save & Proceed” option for going to the next step.
- In the next step, the person will be asked to take a decision regarding the portfolio allocation out of four different available funds which are subjected to the highest exposure of 50% to the equity funds. The entering of the allocation details has to be followed by updating the details of the nominee.
- After updating the nominee details, one needs to upload a canceled cheque of his/her account, with a recent passport-sized photograph and his/her specimen signature.
- The final stage involves making the very first contribution towards NPS which should be at least Rs. 500. The first payment can be made either through net banking or through an individual’s credit card (along with some extra charges).
- The successful accomplishment of the payment procedure is followed by the generation of the person’s Permanent Retirement Account Number (PRAN)along with the payment receipt.
- Then the person should click on “Download Registration Form/E Sign” for completion of the registration procedure by submitting the OTP sent to the registered mobile number by UIDAI to along with the person’s Aadhaar number.
It is important to note that it takes two days for the units for getting credited against the person’s PRAN number. The person will also get an email on his/her registered email id about the IPIN generation for his/her PRAN, which the person can use for accessing his/her online account and for making further contributions in the NPS account.
The NPS offers the perfect retirement solution for the elderly. Moreover, it has gone digital which has made ease of accessibility from anywhere and at any time, simply at the click of a mouse. So one can relax and enjoy the retirement years.
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