NPS: National Pension System, or National Pension Scheme, is a popular way of investment for post retirement life. It gives you the option to have a decent lump sum amount at the time of retirement and a monthly pension after that. Its Tier-1 account provides you tax benefits under Section 80C of the Income Tax Act. But if you do not deposit the minimum prescribed amount in a year, your NPS account may be frozen or deactivated. Know how you can reactivate your NPS account.
NPS: National Pension System, or National Pension Scheme, i.e. NPS, is a popular investment tool for post retirement life. It helps one achieve financial freedom by having a lump sum money at retirement and a monthly pension after that. While NPS is necessary for central government employees, the scheme is also extended to private sector employees. NPS invests one’s money in market-linked programmes and debt funds, which help accountholders get lump sum amount and a monthly pension. You can take 60 per cent of the total amount invested in NPS in lump sum after turning 60, while 40 percent is used as annuity.
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One can invest money is NPS in two ways- through a Tier-1 account, which is a retirement account, and a Tier-2, which is a voluntary account.
However, a mistake made during the investment in NPS can freeze your account. However, you can reactivate the frozen account.
Know here why an NPS account becomes inactive and how to reactivate the inactive account.
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NPS: Why your NPS account can be frozen
To subscribe to NPS, it is necessary to open a Tier 1 account.
After this, the account holder can also open a Tier 2 account.
While opening an account, you have to invest Rs 500 in Tier 1 and Rs 1000 in Tier 2.
After this, it is necessary to deposit at least Rs 500 annually in Tier 1 and at least Rs 250 annually in Tier 2 account.
There is no limit on the maximum contribution.
If you do not deposit the minimum prescribed amount in any year, your NPS account may be frozen or deactivated.
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NPS: How will NPS account be reactivated?
To reactivate a frozen account, you have to fill the UOS-S10-A form.
You can get this form from the Post Office.
Or you can take this form from where your NPS account is running.
You can also download the form online by clicking on the link-
https://nps://npscra.nsdl.co.in/download/non-government-sector/all-citizens-of-india/forms/UoS-S10A-Unfreezing%20of%20PRAN.pdf
A copy of the subscriber’s PRAN card also has to be attached with the form. Besides, the subscriber has to deposit the outstanding amount of annual contribution in the account and also has to pay a penalty of Rs 100.
After submitting the application, your account is verified by NPS officials. After this, your application is processed and PRAN is activated.
