To invest in NPS, you will be required to open an NPS account .NPS is a low-cost, tax-efficient, flexible and portable retirement savings account.
Under the NPS, the individual contributes to his retirement account.
His employer too can also co-contribute for the social security/welfare of the individual.
NPS is designed on Defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.How NPS worksThe greater the value of the contributions made, the greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, the larger is the eventual benefit of the accumulated pension wealth likely to be.PFRDA Pension Fund Regulatory and Development Authority or is identified as Nodal Authority to manage NPS operations.NPS is distributed through authorized entities called Points of Presence (POP's ) and almost all the banks (both private and public sector) are enrolled to act as Point of Presence (POP) under NPS apart from several other financial institutions.
To invest in NPS, you will be required to open an NPS account through the Point of Presence (POP) and who will assist the subscriber in opening the account, including the filling up of necessary forms, providing information about NPS and any other relevant information in this regard.The funds contributed by the subscribers are invested by the PFRDA registered Pension Fund Managers (PFMs) as per the investment guidelines provided by PFRDA.
The investment guidelines are framed in such a manner that there is minimal impact on the subscribers contributions even if there is a market downturn by a judicious mix of investment instruments like government securities, corporate bonds and equities.
At present there are eight Pension Fund Managers who manage the subscriber funds at the option of the subscriber.NPS Withdrawal RuleA subscriber wishing to exit from NPS has to submit a withdrawal application form to the concerned POP along with the documents specified for withdrawal of the benefits and the POP in turn would authenticate the documents and forward them to CRA M/s NSDL or National Securities Depository Limited.
CRA in turn would register your claim and forward you the necessary application form along with the procedure to be followed and documents that need to be submitted.
Once the documents are received, CRA processes the application and settles the account.How to check NPS balance onlineNPS provides both online and app facilities for checking account balance and transaction statement:Log in to your NPS account through the CRA website (www.cra-nsdl.com).
Submit your USER-ID and password.(Select transaction statement and then holding statement.)After logging in, select transaction statement and then holding statement, which gives the details of your accumulated balance in NPS fund.(Click on transaction statement, to see details of your transactions including contributions.)Click on transaction statement, to see details of your transactions including contributions.How to check NPS balance through appNPS services are available on the UMANG platform.
UMANG is a government initiative to provide various E-gov services under a single platform.
It has been developed by Ministry of Electronics and Information Technology (MeitY) and National e-Governance Division.
EPFO and NPS services are available on UMANG platform.Download the UMANG app and log in.
Search for NPS and then key in your log in.(: Atal Pension Yojana Vs National Pension System: 10 Things To Know)(NPS provides various services through UMANG app .)NPS provides various services through this app including checking of current holding, transaction statements and recent contributions.
You can also change investment scheme and change address as well.What is tier 1 and tier 2 in NPSUnder NPS account, two sub-accounts - Tier I II are provided.
Tier I account is mandatory.
The subscriber, howvwer, has an option to opt for tier II account opening and operation.
The following are the salient features of these sub-accounts:Tier-I account: This is a non-withdrawable retirement account which can be withdrawn only upon meeting the exit conditions prescribed under NPS.Tier-II account: This is a voluntary savings facility available as an add-on to any Tier-1 account holder.
Subscribers will be free to withdraw their savings from this account whenever they wish.Income Tax Benefit of NPSIndividuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer's contribution as under(a) Employee's own contribution - Eligible for tax deduction up to 10% of Salary (Basic + DA) under Section 80 CCD(1) within the overall ceiling of Rs.
1 lac under Sec 80 CCE.(b) Employer's contribution - The employee is eligible for tax deduction up to 10% of Salary (Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs.
1 lakh.