Who is eligible for the National Pension Scheme? - Nidhimehra2812/Mutual-fund-investment GitHub Wiki
The Government of India introduced the National Pension System (NPS) to promote retirement saving among individuals. The scheme was earlier launched only for Government employees but then, in the year 2009, it was made public to all. Moreover, to encourage individuals to invest in NPS online, the Government also introduced tax benefits on NPS investments.
Today, if you want to create a market-linked retirement corpus which also helps you in saving tax, you can invest in NPS online and avail the benefits of the scheme. To invest in the NPS scheme, however, the following eligibility parameters would have to be fulfilled –
- Eligibility requirements for NPS investments
- You should be aged between 18 and 65 years
- If you are a senior citizen (aged 60 years and above) as on the date of investment into the NPS scheme, you would be allowed to invest till 70 years of age
- You should be a resident Indian citizen
- NRIs can also invest in NPS online. However, after opening an NPS account, if the citizenship of the NRI changes, the account would be closed
- You should have a valid bank account and be compliant with the KYC norms so that the account can be opened successfully
- How to invest in NPS scheme?
You can invest in the NPS scheme through a bank or a post office which has been authorized by the Pension Fund Regulatory and Development Authority (PFRDA) to act as a Point of Presence Service Provider (POP-SP). Almost all banks have been allowed to act as POP-SPs to allow NPS investments. The investment can also be done online or offline as per your suitability. In fact, you can invest in NPS online through banks, post offices and also through the personal finance app of ETMONEY. In fact, ETMONEY’s personal finance app is a better way to invest as you can choose the best NPS investment plans which offer the best returns and invest online. To invest online or offline the following documents would have to be submitted –
- NPS subscriber registration form
- Your identity proof
- Your address proof
- Your age proof
- Your bank account details for automating your contributions to the scheme
- Your photographs
When you choose ETMONEY’s personal finance app, the documents can be uploaded online through your Smartphone and your KYC verification is also done online. So, ETMONEY’s app is an easier mode of investing in the best NPS investment plans. Things to remember about NPS investments Now that you know the eligibility conditions of NPS investments, the documents required and how you can invest, here are some important aspects of the scheme which you should know – NPS is a market-linked investment scheme. When you invest in NPS, you have to choose a pension fund manager to manage your investments. There are different pension fund managers authorized by the PFRDA and you can compare the returns offered by each to choose the best NPS investment plans You would have to choose an investment strategy from two available options – Active Choice and Auto Choice. Under the Active Choice strategy, you pick the investment funds and allocate your investments. Under the Auto Choice strategy, your investment is allocated automatically based on the risk profile that you choose
NPS is a long term investment option which continues till you reach 60 years of age Investments into the scheme can be claimed as a deduction up to Rs.2 lakhs under Sections 80CCD (1) and (1B). On maturity, 60% of the corpus can be commuted which would be a tax-free income So, understand the NPS scheme and invest in it to build a retirement corpus for yourself.