Types of Ac­counts

Consumer Voice - - Pension -

The NPS of­fers the fol­low­ing two types of ac­counts to sub­scribers: Tier I Ac­count: This ac­count is manda­tory for open­ing the NPS ac­count. It is gen­er­ally a non-with­drawal ac­count ex­cept when al­lowed un­der PFRDA Act. Sub­scribers con­trib­ute their sav­ings in this ac­count and can claim tax ex­emp­tion on their con­tri­bu­tions un­der Sec­tion 80C of In­come Tax Act. The min­i­mum con­tri­bu­tion is Rs 500 for ini­tial and sub­se­quent con­tri­bu­tions. So, the min­i­mum con­tri­bu­tion in a year is Rs 6,000. Tier II Ac­count: This is a vol­un­tary sav­ings fa­cil­ity but not a re­tire­ment ac­count. An ac­count un­der Tier II can­not be opened un­less the sub­scriber is al­ready hav­ing a Tier I ac­count. Un­der this ac­count, fa­cil­i­ties for with­drawals are avail­able dur­ing the sub­scrip­tion pe­riod. How­ever, no tax benefits can be claimed on such con­tri­bu­tions. Fur­ther, the min­i­mum con­tri­bu­tion per year is pegged at Rs 2,000 un­der this model. There has to be a min­i­mum of one con­tri­bu­tion in each year. Ini­tial con­tri­bu­tion at the time of open­ing this ac­count is Rs 1,000 and sub­se­quent con­tri­bu­tions have to be a min­i­mum of Rs 250.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.