Open an NPS Account Online in Five Easy Steps

With the financial year-end fast approaching, the window for tax-saving investments narrows down to just about 10 days. Seize the opportunity to claim deductions on investments made until March 31.

If you haven’t yet explored tax-saving avenues, consider the National Pension System (NPS) for both tax benefits and securing your post-retirement financial well-being.

Here’s what you need to know before diving into NPS investments:

Maximizing Tax Benefits

Experts advocate including NPS in your investment portfolio, allowing you to avail additional tax deductions of up to Rs 50,000 under section 80CCD(1B), even if you’ve exhausted the Rs 1.5 lakh limit under section 80C.

Key Considerations

Understanding NPS entails grasping its lock-in period. While funds deposited in NPS remain inaccessible until you reach the age of 60, partial withdrawals are permitted after three years of account opening.

Upon reaching 60, you can withdraw 60% of the accumulated amount tax-free, while the remaining 40% must be utilized to purchase annuity, ensuring a steady pension income.

Opening an Online Account

You can initiate the process of opening an NPS account from the comfort of your home through the following steps:

1. Prepare Your Documents: Gather essential documents including PAN, Aadhaar number, canceled check, along with a mobile number, email ID, and a bank account with net banking facility.
2. Registration: Visit the Protean (formerly NSDL) CRA portal and register for an eNPS account under the Individual Subscribers tab.
3. Generate Acknowledgment Number: Enter your personal information, verify via OTP on your Aadhaar-linked mobile number, and upload your signature. Double-check details before generating the acknowledgment number, which will be sent to you via SMS or email.
4. Select Pension Fund Manager: Choose from 11 pension fund managers to oversee your retirement investments and select NPS funds based on your preferences.
5. Nominate Beneficiaries: Appoint a nominee and determine their share in case of your demise. Upload scanned copies of PAN, canceled check, and signature.
6. Make Initial Contribution: Contribute a minimum of Rs 500 to your Tier 1 account, and pay Rs 18 for ePRAN card and welcome kit if opting for digital delivery.

By following these steps, you can unlock the benefits of tax exemption and secure your financial future through the National Pension System.