National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers to make optimum decisions regarding their future through systematic savings during their working life. It was launched with an aim to provide pension benefits to individuals during retirement years. The government has offered income tax benefits.
An individual is eligible to claim a deduction of Rs 50,000 under Section 80CCD(1B) of the Income-tax Act, 1961. This is over and above the Rs 1.5 lakh deduction available under Section 80C in a financial year. Further, if an employer contributes to the individual’s NPS account, then she is eligible to claim deduction under Section 80CCD (2).
Currently, the Pension Fund Regulatory and Development Authority (PFRDA) has mandated three central record keeping agencies (CRAs) for opening of NPS accounts of subscribers. These are NSDL, CAMS and KFintech.
To explain the account opening process step by step, the process followed by KFintech while opening an account is mentioned. However, the process to open an NPS account with other CRAs is more or less the same.
Do note that an individual cannot have more than one NPS account. So once you open an account with a CRA, you cannot open another account with another CRA.
Steps to open NPS account online:
Step 1: Visit nps.kfintech.com and select “Join NPS”.
Step 2: A new webpage will open on your screen. You will be required to make a registration by entering details such as full name, mobile number, email address, subscriber type (individual or corporate subscriber).
Step 3: Once you click on “Create Account”, you will receive a one-time password (OTP) on your mobile number. The OTP is valid for 30 minutes. Verify the OTP to go to the next step.
Step 4: The individual has to fill in 5 sections – Personal Details, KYC Details and FATCA, Investment Details, Upload Documents and Payment.
In the personal details’ section, the individual will have to provide details related to residential status, PAN, gender, salutation, date of birth, country of birth, place of birth, nationality, name to be printed on PRAN card, marital status, occupation details.
Step 5: Once the details are added, click on “Save and Proceed”.
Step 6: The next step is KYC Details and FATCA. An individual can do the KYC procedure either via PAN or Aadhaar. Do note that a one-time fee of Rs 125 (plus GST at 18%) is applicable if the individual opts to do KYC with PAN. There are no additional charges on doing KYC via Aadhaar.
