Recently PFRDA opened a new portal called eNPS. Using this portal, you can open and invest in NPS account online. This is the big relief to many NPS subscribers. Let us see it’s features.
What is National Pension Scheme (NPS)?
This is the retirement product also called as Defined Contributory product. There is no defined benefit. You contribute to this product (in case of Govt. employees, your employer too). Your retirement corpus depends on the amount you contribute and the income generated from this contribution.
Such accumulated retirement corpus can be withdrawn once you retire and can be utilized to buy an annuity (pension product). You are allowed to withdraw part of it before you can buy an annuity. We can explain the same as below.
This is regulated by Government body called as Pension Fund Regulatory Development Authority (PFRDA). PFRDA appointed fund managers, who manage your fund. There are various options of investment to choose based on your risk appetite.
An individual with the age limit of minimum 18 years and maximum 60 years of age can join NPS. Now, NRIs are also allowed to open NPS account.
Once you open NPS account, then you will be allowed a PRAN (Permanent Retirement Account Number), a 12 digit unique number. A minimum of Rs.1,000 can be invested and there is no maximum limit. But minimum single contribution is Rs.500 for Tier 1 and for Tier 2 it is Rs.250.
Note-As per recent PFRDA circular dated 8th August, 2016, the minimum contribution in Tier 1 Account is now reduced to Rs.1,000 a year. There will be no minimum investment limit for Tier 2 account (Earlier, it was Rs.250). Also you no need to maintain the minimum balance in Tier 2 account (Earlier, it was Rs.2,ooo).
As of now there are 7 fund managers, who managing the overall NPS amount. They are as below.
- HDFC Pension Management Company
- LIC Pension Fund
- ICICI Prudential Pension Fund
- Kotak Mahindra Pension Fund
- Reliance Pension Fund
- SBI Pension Fund
- UTI Retirement Solutions
As of now there are 7 insurance companies, who provides you pension products for NPS. They are as below.
- Life Insurance Corporation of India (LIC)
- SBI Life Insurance
- ICICI Prudential Life Insurance
- Bajaj Allianz Life Insurance
- Star-Daichi Life Insurance
- Reliance Life Insurance
- HDFC Standard Life Insurance
There are mainly two types of NPS accounts. One is called Tier 1 and another is Tier 2. You can read the full details about these two accounts in my earlier post “Difference between Tier 1 and Tier 2 Account in NPS“.
What are the tax benefits of investing in NPS?
# Employees of Self Employed Contribution-Employees (Up to 10% of Basic+DA) and for self-employed, up to 10% of gross income will be eligible for deduction under Sec.80CCD (1). This Sec.80CCD (1) is part of Sec.80C limit. Hence, the maximum tax benefit you can avail is Rs.1,50,000.
# Employers contribution-Employers deductions will be claimed by employees under Sec.80CCD (2). The limit for such deduction is lowest of the below three conditions.
- Amount contributed by an employer.
- 10% of Salary (Basic+DA).
- Gross Total Income.
# Additional Rs.50,000 Benefit-Along with above two tax benefits, you can claim additional Rs.50,000 tax benefit under Sec.80CCD (1B). This is over and above Sec.80C limit.
Taxation at maturity-From Budget 2016, 40% of NPS corpus withdrawn at the time of retirement is tax-free. Rest of the amount taxable to you as per the applicable tax slab for that particular year. The annuity you receive from rest of the corpus will be taxable income as per your tax slab.
What are the withdrawal options for NPS?
Refer my latest post on the same “National Pension System (NPS)-New Partial Withdrawal and Exit Rules“.
This is all about the brief introduction about NPS product. Now let us concentrate on our main purpose of this post.
How to open and invest in NPS account online?
PFRDA recently started eNPS portal. Using this portal, you can open a new account and invest or contribute to NPS account online. Using the eNPS portal, you can generate PRAN and start investing online.
Note-Now NRIs are also allowed to open NPS account online using eNPS. (As per Ministry of Finance Notification).
Some features of eNPS portal are as below.
- You must have either Aadhaar or PAN card to open this account.
- If you try to open an account using Aadhaar, then the OTP (One Time Password) will be sent to your registered mobile number.
- The details like your photo, address, contact details will be fetched from the Aadhaar database.
- if you try to open an account using PAN, then your verification will be done by using the KYC details you provided to your bank.
- You can open both Tier 1 and Tier 2 accounts also. However, those who want to open Tier 2 account only then PAN card and bank details are mandatory.
- The process is not fully ONLINE. Because, once you submit the application online, then you have to take the registration form printout. You have to paste the photograph, affix the signature and send it to below address.
Central Recordkeeping Agency (eNPS)
NSDL e-Governance Infrastructure Limited 1st Floor,
Times Tower, Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai – 400 013.
- You have to contribute the minimum single investment amount while opening the account (Rs.500 for Tier 1 and Rs.1,000 for Tier 2.)
- You can invest NPS account either through net banking or using debit/credit card.
- You will get the PRAN immediately. You will receive the PRAN to your registered phone and email instantly. You will receive the PRAN card later through post.
- The contributions will be credited to your NPS account within two days of successful remittance of the amount.
- Subscribers who open the new NPS account using eNPS can contribute online. Along with that, members who are NPS accounts holders can create a login and start investing online. Government employees, who are members of NPS account, can create their account online and start investing in their Tier 1 account on their own.
- If you have any doubts, then you can email to firstname.lastname@example.org.
How to open and invest in NPS account online ?
Let us first try to understand how a new investor can open an account online by using eNPS.
Below are the steps you have to follow for opening the NPS account online.
# Visit Home Page of eNPS
Click on the options among three. The first one is for opening a new account and registration. The second option is for contribution and the third option is for activation of Tier 2 account of NPS. The screen looks like below. First, click on “Registration” tab.
# New Registration Window-
From below screen you chose the option “New Registration” if you are activating the account first time. Choose “Complete Pending Registration”, if you already did part of registration and saved but not fully completed. Choose “Print Completed Registration Form”, if you completed the process of registration and trying to print the hard copy of the same.
Next is to choose whether you are an individual subscriber or Corporate subscriber (this is meant for your employer). Next, you have to specify your residential status. Then, you have to choose either Aadhaar option or PAN option for registration.
You have to choose which account type of NPS you want to open. Better to opt the first one (Tier I and Tier II). Then finally enter your Aadhaar number and request for OTP. They will send the password to your registered mobile number. The complete screen looks like below.
# eNPS Registration Process–
Once you enter OTP, then you will be redirected to registration window. This window looks like below.
Please note that fields marked with “*” are mandatory. Click on “Save & Proceed” button in short intervals to avoid data loss due to session expiry. Click on “Reset” button to clear the unsaved data.
If you try to create an account with PAN number, then details will be validated online with the Income Tax dept. If PAN records matches with the information provided during NPS registration, you will get PAN Details confirmation message.
Majority of data will be automatically fetched from Aadhaar database or PAN details. You have to specify Bank details (not mandatory), nomination details, investment fund option and you have to upload the signature image. Once, everything over, then you have to confirm.
Finally, you have to go for payment tab and pay the minimum amount of Rs.500 (for Tier 1) and Rs.1,000 (for Tier 2). Once you do the payment, then you will receive the PRAN to your email and mobile number. The PRAN kit containing a PRAN card, IPIN/TPIN, subscribed master report, scheme information booklet along with a welcome letter will be sent to your registered address.
# eNPS Registration Form–
Once the process is over, then you have to take the printout of the registration form, paste your photograph and sign on it. Send this form to below said address within 90 days from the PRAN activation date.
Central Record keeping Agency (eNPS)
NSDL e-Governance Infrastructure Limited,
1st Floor, Times Tower,
Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai – 400 013.
How to invest in National Pension Scheme (NPS) account online?
If you already have PRAN, then you can invest online. For this purpose, you have to click on “Contribution” tab. Then enter your PRAN and date of birth to validate and proceed for online payment option. The screen looks like below.
You can invest online by using SBI ePay. This option provides you to pay by any of 40 associated banks. You can pay through net banking or using credit/debit card option.
There are other options to open or invest in NPS account online. But they are points of presence or middlemen. However, the above eNPS portal is from PFRDA. So it’s like directly operating with PFRDA. Hope I cleared the majoring of process and doubts of how to open or invest in NPS account online.
Do you have any problem in open or invest in NPS account online? Please share the same by commenting. Let me and other readers may know and it will benefit to other fresh account opening individuals or investors of eNPS platform.
What are the benefits to open and invest in NPS account online?
You are completely avoiding the middlemen or POP (Point of Presence) using this eNPS platform. Hence, you can save Rs.125 of initial subscription charges. Also, while investing online, you can save the 0.25% of charges which will be charged by POP at the time of investment.
However, rest of the charges like annual maintenance charges or AMC charges will not be avoidable.
eNPS New Updates effective from 1st June 2017-
# Hindi version of eNPS module
Now Hindi is also added in eNPS. The Subscriber shall have the option to choose the desired language option (either English or Hindi) for Registration and/or Contribution through eNPS.
# eSign for Aadhaar based Registration
In case of registration through Aadhaar, it was mandatory for Subscriber to submit physical Application Form within 90 days of completion of registration under eNPS. eSign facility (Aadhaar e-KYC services) has been integrated with eNPS platform to enable the Subscriber to sign his/her PRAN Application electronically. This process has eliminated the requirement of submission of physical documents to CRA.
# New Payment Gateway – Bill Desk
In eNPS, along with SBI ePay, Bill Desk has been integrated as the second Payment Gateway Service Provider. This will help the Subscriber to make payment through any service provider as per his/her choice by selecting the available payment options. An addition of Billdesk as new payment gateway has ensured participation of new banks which were not part of SBl e-Payment gateway especially AXIS Bank and HDFC Bank.