7 Things to Remember While Registering for NPS

The National Pension System is a voluntary retirement scheme for those individuals who are looking to financially secure their future. You need to follow certain steps for NPS registration. In this blog, we’ll explore the 7 important points to remember to do an NPS registration.

The National Pension System – An Overview

It is designed to offer various tax benefits, flexibility, and diversity, making it one of the popular choices for investment. National Pension System (NPS) is a government-sponsored retirement savings scheme designed to provide financial security to individuals during their retirement years. It offers various tax benefits, flexibility, and a range of investment options, making it an attractive choice for many.

Understanding NPS Tax Benefits

One of the significant advantages of NPS is it comes with various tax benefits. You can save your hard-earned money while safeguarding your retirement years. When an investor contributes an NPS Tier I account then he/she is eligible to avail of tax deductions up to ₹1.5 lakh under 80C of the Income Tax Act. An extra deduction of ₹50,000 is also available under Section 80CCD 1(B). Upon maturity, 60% of the accumulated corpus can be withdrawn tax-free and the remaining 40% is used to buy an annuity to receive the pension.

However, to make the most of NPS, it’s crucial to understand the registration process and key considerations.

Here are 7 things you should remember while NPS registration

1. You will need your PAN card, Aadhar card, and bank account number. Keep them close to you for paperless transactions. 
2. Secondly, open an NPS account with a CRA. You don’t need to give PoP charges while opening an NPS account.  
3. Create your account but don’t forget to set a strong password.
4. Now remember to choose the NPS type. You will have to open an NPS Tier I account before selecting to invest in a Tier II account.
5. How would you want to contribute? Select between the auto and active choices.
6. Set your contributions on auto mode or SIP mode so your investment approach becomes disciplined.  
7. Stay updated about investment updates, news, and trends as they might affect your investment strategy. Make the adjustments if necessary and don’t forget to diversify.

Conclusion

NPS registration can be an important step towards securing your retirement. But before you sign up for it you need to understand the NPS structure to have clarity while you plan for your golden years. From gathering the documents, and enrolling through a trustworthy website, to choosing the right PoP; you can maximize your returns. Follow the instructions that are mentioned above and they can help to accumulate a robust retirement corpus.