How to Open NPS Account in 2024 (Online & Offline)

The Union government of India provides several schemes for its citizens, one of which is the National Pension System (NPS). By investing up to Rs. 2 lakh, you can save on taxes and accumulate a substantial amount of funds that can be used for your retirement.

This NPS system can help you receive a significant monthly pension amount. If you want to open an NPS account, let me guide you through the online and offline process.

How to Open NPS Account

The National Pension Scheme (NPS) is a popular central government scheme that offers substantial returns and tax benefits, making it a useful tool for retirement planning. There are two types of accounts available under this scheme, namely Tier-I and Tier-II.

The Tier-I account is mandatory for everyone and has a lock-in period, which means that investments cannot be withdrawn until the specified period expires. However, this account offers tax benefits. On the other hand, the Tier-II account is not mandatory, and investments can be withdrawn anytime, but it does not offer any tax benefits.

Under Section 80C of the Income Tax Act, the Tier-I account provides significant tax benefits, where a maximum of Rs. 2 lakh tax can be reduced. To open an NPS account, one can choose between online and offline modes.

NPS Account Open
NPS Account Open

How to Open NPS Account Online

  1. To begin, kindly visit the NSDL website by clicking on this link
  2. Please click on the “National Pension System” option and then select the “Register with Aadhaar” option.
  3. Once you enter your Aadhaar card number, an OTP will be sent to your registered phone number.
  4. In addition to the OTP, you need to provide your personal and nominee details, as well as your bank information.
  5. Double-check the details and submit to receive your PRAN (Permanent Retirement Allotment Number).
  6. To sign electronically, please click on the e-signature option. Once you have clicked on it, you will receive an OTP on your mobile number.
  7. Once the One-Time Password (OTP) has been entered, the signature needs to be verified before proceeding to complete the payment.

How to Open NPS Account Offline

  1. To complete the process offline, kindly visit the nearest Point of Presence (POP) office and submit a physical application to open your NPS Account.
  2. Please take the registration form from there and fill in all the required details.
  3. Please note that it is necessary to submit your KYC (Know-Your-Customer) documents.

NPS Scheme New improvements

Economists are predicting that the central government will make the National Pension System (NPS) scheme more attractive this year. There are expectations that measures such as extending tax exemptions on deposits and withdrawals from NPS will be taken.

This change will benefit those who are aged above 75. Currently, under the old tax system, the amount deposited in NPS is eligible for a tax rebate up to Rs. 50,000.

As per Section 80C of the Income Tax Act, a maximum of Rs. 1.50 lakhs can be claimed as tax savings. Additionally, a total of Rs. 2 lakhs tax-saving facility is available. Many are requesting that this be implemented in the new tax regime as well.

NPS Pension for 30 Years Old

Consider a hypothetical scenario where a 30-year-old person invests Rs. 5,000 per month in an NPS account. If they divide their investment equally between equities and government/corporate bonds, they can expect an annual contribution increase of 6% and investment returns of 10%.

By following this investment strategy, their corpus is likely to reach Rs. 1,84,96,125. If they choose a 100% annuity, they can receive a monthly pension of Rs. 1,05,292 starting from the age of 60.

Similarly, if a 40-year-old person wishes to receive a monthly pension of over Rs. 1 lakh, they will need to invest Rs. 5,000 per month. If the annual contribution increases at a rate of 20%, and the annuity rate is 6.5%, they can expect to receive a pension of Rs. 1,13,730 per month.

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