Step-by-Step Guide to Open an NPS Account
Understanding the eligibility criteria for the National Pension Scheme (NPS) is crucial for securing your financial future. This government-regulated, voluntary retirement savings plan is designed to offer long-term financial stability during retirement. Begin your journey today by exploring whether you meet the eligibility requirements.
NPS Eligibility
Understanding the eligibility requirements for the National Pension Scheme (NPS) is crucial for securing your retirement. Meeting these criteria allows you to take advantage of the benefits NPS offers, ensuring long-term financial stability. Start your journey toward a financially secure future today.
NPS Eligibility Criteria for Indian Citizens
The National Pension Scheme (NPS) is a government-regulated, voluntary retirement savings plan designed to provide financial security during retirement. Participation in NPS requires adherence to specific eligibility criteria, which include factors such as age, citizenship, and compliance with Know Your Customer (KYC) norms.
Age Range:
For the All-Citizen Model and Corporate Model, eligible participants must be between 18 and 70 years old.
For the Central Government/CABs and State Government/SABs models, the eligible age range is 18 to 60 years.
Citizenship:
The All-Citizen Model and Corporate Model are open to Indian citizens, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCI).
For the Central Government/CABs and State Government/SABs models, eligibility is restricted to Indian citizens, with NRIs and OCIs being eligible based on specific departmental rules and regulations.
KYC Compliance:
KYC (Know Your Customer) compliance is mandatory across all NPS models. This involves providing necessary identification and address proof to verify your identity.
Meeting these eligibility criteria is the first step toward securing a stable and comfortable retirement with NPS.
| Feature | NPS Tier 1 Account | NPS Tier 2 Account |
| Account Opening | Tier 1 account opening is a prerequisite for opening a Tier 2 account | Can be opened only if Tier 1 account is active |
| Who Is Eligible? | All Indian citizens between the ages of 18 and 70 | Any Indian citizen with an active Tier I account |
| Mandatory Account | Mandatory for all NPS subscribers | Voluntary add-on account |
| Taxes on Withdrawals | 60% of the corpus, which is what can be withdrawn at maturity, is exempt from taxes. | The withdrawn amounts are added to the account holder’s income, which is taxed as per the current income tax slab rates. |
| Are Contributions Exempt from Tax? |
Contributions up to INR 1,50,000 per year qualify for deductions under Section 80C of the Income Tax Act.
Further deductions of INR 50,000 can be availed under Section 80CCD(1B). |
No, contributions made to Tier II accounts are not exempt from tax. |
| Minimum Contribution Required to Open Account | INR 500 | INR 1,000 |
How to Open an NPS Account Online
To open an NPS account online, you need to visit the website of one of the Central Recordkeeping Agencies (CRA), which are responsible for maintaining the database of NPS subscribers.
Here’s a step-by-step guide to opening a new NPS account –
Step 1: Access the Registration Link: Visit the registration link of any of the following CRAs –
- KFin Technologies Limited
- Protean eGov Technologies Ltd
Step 2: Provide Details- Enter your mobile number, Permanent Account Number (PAN), and email ID.
Step 3: Verify Your Identity- Confirm the OTP sent to your phone.
Step 4: Follow On-Screen Instructions – Complete the registration by following the instructions provided.
Step 5: Receive Your PRAN- After completing the process, you will receive your Permanent Retirement Account Number (PRAN), which you can use to log in to your NPS account.
How to Open an NPS Account Offline
To open an NPS account offline, you will need to visit your nearest Point of Presence (PoP), which assists in registering your NPS application. Here are the steps for offline registration:
Step 1: Find Your Nearest PoP- Locate the nearest Point of Presence.
Step 2: Visit the PoP- Go to the PoP and fill out the application form.
Step 3: Complete KYC Requirements- Submit the necessary documents to fulfill the KYC norms.
Step 4: Make the Payment- Pay a minimum of ₹500 for a Tier I account.
Step 5: Submit the Application- Hand in your completed application form.
You should receive your PRAN kit via post, which may take more than 10 days to arrive.
Conclusion
Opening an NPS account is an important step toward a financially secure retirement. Individuals can easily and conveniently take control of their retirement planning by following the steps outlined above and understanding the benefits of NPS.
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