National Pension System: Check how to apply for NPS Tier II account

The National Pension System (NPS) is a voluntary, long-term pension scheme which provides an opportunity to investors to go for both debt and equity exposure through a single investment tool. The subscribers of NPS Tier I can choose the add-on Tier II account to get flexibility in investments and withdrawals. Subscribers of the voluntary Tier II account can invest and withdraw from various schemes without any exit load. However, no tax benefits are available on a Tier II account. People can also transfer funds from Tier II to Tier I account via One way Switch. However, the opposite is not allowed, meaning Tier I account holders cannot transfer money to Tier II NPS accounts. Taxation: While Tier I account subscribers can claim the tax benefit of Rs 1.5 lakh under Section 80 and an additional deduction of Rs 50,000 under Subsection 80CCD (1B), no tax benefit is available if you opt for a Tier II account. In case of a Tier I account, 60 percent of the total corpus received on maturity is tax-free. The amount invested in purchasing an annuity plan is fully exempt from taxation. In addition, GST is not applicable on annuity plans bought through the NPS on exit. The money from partial withdrawal is also exempt from tax under Section 10 (12B). However, in a Tier II account, the subscribers need to pay tax according to the marginal tax rate applicable to them on the returns. An NPS Tier II account can be opened both online and offline. For opening a Tier II account, it’s mandatory to open a Tier I pension account. How to open a NPS Tier II account: Online Process: Step 1: Visit the website of eNPS at enps.nsdl.com. Step 2: Click on “Tier II Activation” visible on the page. Step 3: Key in your Permanent Retirement Account Number (PRAN), date of birth, and Permanent Account Number (PAN). Step 4: Then, verify and activate the account. Offline Process: One can visit any Points of Presence (PoP) registered with Pension Fund Regulatory and Development Authority (PFRDA) to open a Tier II account. Tier II account subscribers get multiple investment options- equity up to 50 percent, corporate bonds up to 100 percent, and government securities. Applicants are required to be between the age of 18- 60 years as on the date of submission of their application to the POP/ POP-SP. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.