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NPS Tier 1 Account How to Open Eligibility and Benefits

May 25, 2022 Alankit

It is important to create a pool of funds while making plans for retirement. In order to create a happy second childhood, one must create a healthy corpus to support their superannuation. The National Pension Scheme is one such retirement scheme introduced by the Government of India to assist an individual in the successful planning of their retirement.

The Government tried to lay a foundation for a stronger tomorrow through the NPS retirement scheme and Tier-I account is the first step an individual needs to take when one is thinking of enrolling in the scheme. The scheme fulfils the need for pensions of both public and private sector employees.

What is the eligibility to open an NPS Tier-I account?

To open an NPS Tier-I account an individual needs to fulfil the following conditions:

  • You should be aged between 18 to 70 years.
  • You should be a resident Indian or an NRI.
  • To open an NPS Tier-I account, you have to make a minimum contribution of Rs.500. Thereafter, in one financial year, a minimum contribution of Rs.1000 should be made towards NPS Tier I.

What are the documents required to open an NPS Tier-I account?

The documents that have to be submitted along with the NPS account opening form are as follows:

  • Registration Form
  • Identity Proof
  • Address Proof
  • D.O.B. or Age Proof

What are the features of the NPS Tier-I account?

The following are the features of the NPS Tier-I account:

  • Subscription Eligibility: The Government & Private Sector employees can subscribe.
  • Investment: Can invest as low as Rs. 1000 annually.
  • Tax Deduction: Investors can get an additional tax deduction of Rs. 50,000 under Section 80CCD (1B).
  • Salary Deduction: 20% of the employee’s salary gets contributed to NPS.
  • Tax Exempt: Returns earned on NPS are exempted from taxation.
  • Premature Closure: Under the Tier-I account, premature closure is available subject to certain terms and conditions.

How to open an NPS Tier-I account?

The Tier-I NPS account can be opened offline and online both and to open an NPS Tier-I account offline, one must:

  • Visit the nearest Alankit branch for the offline process.
  • Duly fill out the application form available at the branch.
  • Affix the required documents with the application form and submit them.
  • Mention the amount you would like to periodically invest.

To open a Tier-I NPS account online, one must:

  • Visit Alankit’s Website
  • Raise a query for NPS enrolment and one of the representatives will get back to the seeker.
  • The seeker can also mail Alankit at nps@alankit.com to carry forward the process.

What are the tax benefits under the NPS Tier-I account?

When you invest in the Tier-I account of NPS, you avail the following benefits:

  • Investment up to Rs.1.5 lakhs would be allowed as a deduction under Section 80CCD (1) and this limit includes the deductions under Section 80C.
  • An extra investment of up to Rs.50,000/- would be allowed as a deduction from taxable income under Section 80 CCD (1B).
  • Partial withdrawals from NPS Tier I Account would be tax-free.
  • On maturity, up to 60% of the accumulated fund value can be availed in a lump sum which is also completely tax-free.

Why Alankit?

Ensure a healthy post-retired life with NPS investment and let the experts at Alankit, help you in building the post-retirement corpus by enrolling you for NPS Tier-I account and providing you with features such as:

  • Expert guidance throughout
  • Investment Solutions
  • PAN India Wide Network
  • Regulating Tax Benefits

We fulfil the customer’s end-to-end needs and make sure to provide smooth onboarding and easiness in the processing of the account.

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