National Pension System: Planning to open an NPS account? Here is how to do it online

By: |
March 24, 2020 2:15 PM

The main purpose of NPS is for depositors to get pension during retirement, along with the benefit of tax-saving every financial year. The NPS offers extra Rs 50,000 annual tax saving along with 40 per cent tax saving on the investor's retirement corpus.

National Pension System, NPS, New Pension Scheme, defined benefit pension, defined contribution pension, annuity service providers, annuity options, default ASP, default annuity option, income tax, income tax saving, Income Tax Saving for FY2019-20, PPF, NPS, ELSS, home loan, NSC, Sukanya Samriddhi Yojana, section 80C investments, 80CCC, 80CCD(1), If you choose the active mode of investment, you have to specify how you want to spread corpus across fund classes.

The National Pension System (NPS) was brought in by the government to allow people to get pension during retirement. It was especially for the self-employed professionals, and those people working in the unorganized sector.

The main purpose of NPS is for depositors to get pension during retirement, along with the benefit of tax-saving every financial year.

With the accumulated saving from an NPS account on maturity, the depositor has to use 40 per cent of that to buy an annuity from an insurance company, which will give the investor a regular pension. The NPS offers extra Rs 50,000 annual tax saving along with 40 per cent tax saving on the investor’s retirement corpus.

Find out how you can open an NPS account online;

Things you will need: To open an NPS account online you need to keep some documents ready, including your Aadhaar or PAN. Note that your Aadhaar needs to have your current address and mobile number, additionally, your PAN should also be linked to your bank account. To make your payment you need your net banking facility activated or your debit/credit card. You will also need passport size photos and a scanned image of your signature.

1. Log in to the NPS Trust website – enps.nsdl.com/eNPS/NationalPensionSystem.html. After logging in click on registration and choose the ‘Individual’ option.
2. Then enter your Aadhaar or PAN details – once you do so, an OTP will be sent on your registered mobile number for verification.
3. Then choose the type of account you want to open – start with the Tier I account. However, you can also choose Tier II, if investing for other goals.
4. Next, you have to put in the OTP for authentication. OTP authentication will be required if you have chosen Aadhaar. If you have opted for PAN, to verify your details your bank will charge you Rs 125.
5. You have to put in your personal details next, and click on ‘submit’ to generate acknowledgment number. If you have chosen Aadhaar, most of your details will be pre-filled in the form.
6. Next, you have to choose a pension fund manager. You can choose from any of 8 pension funds.
7. Next, you have to choose your investment mode. While doing so note if you choose the auto mode of investment, your equity allocations will change with your age. In the case of active mode, you have to decide the mix by yourself.
8. If you choose the active mode of investment, you have to specify how you want to spread corpus across fund classes.
9. Then assign your nominees, and give their details, who will get the corpus after you, the investor.
10. Next, you have to upload your photograph and signature. If you have selected Aadhaar, you just have to upload the signature, or else upload a picture.
11. Then make your contribution and get PRAN. The minimum amount that you can invest is Rs 500 for Tier I and Rs 1,000 for Tier II. Once your payment is approved, your PRAN will be allotted.
12. Next download the completed form, print out the form, put a picture of yours, sign it and mail it to the CRA office within 90 days.

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