Payments under the National Pension Scheme
The National Pension System (NPS) is a pension system regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It provides two types of accounts: Tier I and Tier II.
To make payments under the National Pension Scheme, follow these steps:
1.Open an NPS account: Visit a Point of Presence-Service Provider (POP-SP) and submit the required documents to open an NPS account.
To visit https://www.incometax.gov.in
2.Choose a Pension Fund Manager (PFM): Select one or more PFMs from the registered list provided by PFRDA.
3.Select the investment option: Decide between Active Choice or Auto Choice. Under Active Choice, you can determine your asset allocation, while Auto Choice assigns the allocation based on your age.
4.Make contributions: Contribute to your NPS account through online banking, mobile banking, or by visiting a POP-SP. The minimum contribution is Rs. 500, with no maximum limit.
5.Claim tax benefits: Avail tax benefits on NPS contributions under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh per annum. You can also claim an additional benefit of up to Rs. 50,000 under Section 80CCD(1B).
6.Withdrawal: You can withdraw your NPS corpus after turning 60. Partial withdrawals, up to 25% of the accumulated amount, are allowed for specific purposes like education, marriage, or medical treatment after completing 3 years of account opening.
Note that NPS is a long-term investment suitable for individuals focused on retirement planning.
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