NPS Account is the new pension system that is introduced in India. You have to create an NPS account to take advantage of the system. Read the article to know more!
The National Pension system (NPS) is a voluntary social security system that can be accessed online. It is governed by the Pension Fund Regulatory and Development Authority (PFRDA). Its goal is to provide monetary rewards in the form of a pension after retirement.
The central government created the New Pension Scheme (NPS), a social security scheme, in 2014. The New Pension Scheme is a contribution-based scheme that provides pensioners with market-linked returns.
Types of NPS Account
The two types of NPS accounts are Tier 1 account and Tier 2 account.
The NPS Tier 1 Account: is a compulsory account that offers tax benefits under Section 80(C) for contributions made to it. While the standard cumulative advantage under Section 80(C) is limited to Rs.1.5 lakh, subscribers of this account can enjoy an additional tax exemption benefit of Rs.50,000. It is important to note that there are certain restrictions on withdrawals from the NPS Tier 1 Account.
The NPS Tier 2 Account: is an optional retirement and investment account offered to Tier 1 NPS account holders. Unlike the Tier 1 account, investments made in the Tier 2 account do not provide any tax exemption benefits. Individuals with a Tier 1 account in good standing have the opportunity to invest in this account. Currently, there are no restrictions on withdrawals from the Tier 1 account as per the existing NPS guidelines.
Features :
- At maturity, 40% of the NPS corpus is tax-free, while the other 60% is taxed.
- The money used to purchase an annuity is tax-free.
- If you withdraw 40% and invest the remaining 60% in an annuity, your corpus will not be taxed.
- An annuity must be purchased with at least 40% of the corpus.
- Taxes apply to lump sum withdrawals.
- Under Section 80(C), the overall tax exemption in NPS has been increased from Rs.1.5 lakh to Rs.2 lakh per year.
- The annuity pension will be taxed based on the tax bracket of the account holder.
How to Open an NPS Account Online?
The process of enrolling on the new pension system is quite easy. You just have to open an online NPS account. You can do this even with the help of your smartphone. Here we have provided the step-by-step procedure for opening an account online.
- To open an NPS account visit the official website of national security depository Limited.
- After that search for the national pension system tab and click on it.
- https://enps.nsdl.com/eNPS/NationalPensionSystem.html
- You will see a form on the screen and you have to fill in the required details.
- When you submit the form you will get a registration or receipt number. You can use the number you received to access your application later on when required.
- An electronic KYC procedure will be done with the help of OTP.
- After that, the website will ask for the details and you have to enter the amount that you want to invest yearly for the new pension system.
- After you complete the payment you will receive a PDF that will have all the data that you have entered.
If you follow this procedure step by step, the process of opening an NPS account online should not be difficult for you. However, if you face any difficulty feel free to contact Vakilsearch and take help from the Exports.
How to Log in for the First Time to Your NPS Account?
- Click on the link https://enps.nsdl.com/eNPS/NationalPensionSystem.html.
- Under “Additional Services,” select “Login with PRAN/IPIN.”
- After entering your used ID and password, complete the captcha. Select “Submit.”
- Under “Additional Services” Click on “Click Here” incase you have forget your password.
- It will open a new page. Choose “via OTP” or “Nodal Office.”
- If you select OTP, you will be required to enter your PRAN, date of birth, and the One-Time Password (OTP) that you will receive on either your mobile number or email address.
- In the following step, confirm the password you want to use by entering it. After entering the captcha, select “Submit.”
How to Exit From Your NPS Account Online?
If you wish to withdraw the amount from your MPS account and close the account this will be known as the exit from the NPS. This can be done either by using the user ID or Ipin provided to the subscriber or it can be done by the CRA system.
- To exit from the NPS account you just have to go to the exit from the NPS menu on the official website.
- Then you can enter the details required. However, it is to be noted that you can be a subscriber of NPS Till the age of 75 and enjoy the tax benefits.
- If you wish to exact from NPS before that, there are some conditions and payment rules that will be followed.
Calculate your pension with our precise NPS pension calculator for accurate retirement planning.
Benefits:
The New Pension System was implemented in India on 1st April 2016 and it is the first time that a country has introduced such a pension scheme. The new pension system will replace the existing old-age pension system.
Under this new pension scheme, there are two types of schemes: Old Age Pension Scheme and Disability Pension Scheme. These two schemes have been separated into these two categories because of different eligibility criteria for each category. The government has decided to implement the new pension scheme to provide financial security to senior citizens by increasing their income as well as providing them with medical facilities at affordable prices.
Here are some benefits of NPS:
- The new pension system is completely governed by the central government authorities. This makes it more reliable.
- The employees will have more authority and control over the NPS as it is available online. You have to create an NPS account and then you can check all the details easily with your smartphone.
- The minimum amount for the investment of NPS is 10 years; this gives compound interest and in the end, gives maximum benefit.
- The new pension system also provides many tax benefits to employees.
If you wish to know more about NPS and about its procedures you can contact Vakil search. Vakilsearch is an online platform that has experienced lawyers and legal Advisors. They will assist you with all your legal issues and help you understand them.
Conclusion
Pension is a kind of financial assistance that is given to retired people. The amount of pension varies from one country to another. Pension also helps retired people to live comfortably and without any worries about their daily needs.
In India, the New Pension System or NPS has been introduced in the year of 2016. To get the benefits of NPS you need to set up an NPS account. We hope this article made the process easy for you. If you have any confusion or questions about NPS scheme or NPS Account, you can contact vakilsearch. They have a team of experts who can help you with all your queries and make the entire process hassle-free for you.
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