NPS Contribution Online: Tax Benefits, Statement Check, & More

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Managing your finances online has become increasingly convenient and efficient. One such avenue is the National Pension System (NPS), a voluntary contribution pension scheme aimed at providing retirement income to citizens. With the ease of online access, contributing to NPS, checking statements, and understanding the tax implications have never been simpler.

In this blog let us understand NPS Contribution in depth.

What is the National Pension System?   

The National Pension System is suitable for people who want to preserve a steady income after employment. This option is supported by the Indian government and overseen by the PFRDA. During retirement, you can withdraw a portion of the corpus, and the remaining corpus will be invested in the annuity plan, which will secure regular income. Furthermore, you can also make yearly contributions while you're still active as a working professional.

Where Can You Make the NPS Contributions?

When you plan to make the NPS contribution online, you can do it in two different accounts, Tier I and Tier II.

1. Tier 1 Accounts: The Tier 1 account is the main NPS account, which has some limitations on the withdrawal part. All contributions made in this account become qualified for tax-related deductions under Section 80C of the Income Tax Act.
2. Tier 2 Accounts: This account is optional and delivers flexibility when it comes to withdrawal. Compared to the Tier 1 NPS account, all contributions made in the Tier 2 account are not eligible for tax benefits.

How to Make NPS Contributions Online?  

There are several methods to make NPS contributions on ICICI:

ICICI iMobile Pay App  

There are several methods to make NPS contributions on ICICI:

1. Open/ Log in to the ICICI Bank iMobile Pay app.
2. Once logged in, Click on the "Invest and Insure" on the top app drawer option/section.
3. Find and Click on the ‘PPF/NPS/Gold Bond/Pension’ feature and then Select "Instant NPS" to view NPS Portfolio & Contribution.
4. Click on “Make Contribution”
5. Select Tier I or Tier II account for contribution
6. Select Savings account
7. Enter: Amount & Schedule payment as One time or Recurring and confirm Payment
8. Transaction will be processed in 2 working days and will reflect in NPS account in 4 working days

ICICI Net Banking

There are several methods to make NPS contributions on ICICI:

1. Open/ Log in to the ICICI Bank Net Banking.
2. Once logged in, Click on the "Investment and Insurance" tab on the top app drawer option/section.
3. Select "National Pension System" and select your NPS Scheme account & Click to view National Pension System Scheme Portfolio & Contribution.
4. Click on “Make Contribution”
5. Select Savings account
6. Enter: Amount & Schedule payment as One time or Recurring and confirm Payment
7. Transaction will be processed in 2 working days and will reflect in NPS account in 4 working days

Important: Ensure your first NPS contribution online within 45 days of receiving your PRAN (Permanent Retirement Account Number) to avoid account freezing.

What Makes the National Pension System a Great Choice?

Multiple reasons prove NPS to be extremely beneficial for every individual. These are:

1. Flexibility: You can begin the NPS contribution work with a minimum amount of Rs. 1000.
2. Portability: It's possible to transfer the pension account across various locations and jobs in a seamless manner.
3. Inexpensive: The charges of the NPS accounts are affordable. The fees for the yearly fund management are efficiently manageable.
4. Outstanding Returns: You will receive a much higher return due to the combination of debt and equity. These returns are also higher than the normal retirement policies.
5. Compounding: The funds contributed to the NPS account will stay locked in till the subscriber turns 60 years old. The lock-in technique allows subscribers to stay invested for a long time.

What is the Minimum Contribution for NPS Accounts?

Since you can invest funds in the Tier 1 and Tier 2 NPS accounts, you can make the following contributions for both of these accounts:

1. Tier 1 Account: For this account, you can make a minimum investment of Rs. 500 when opening the account. You can contribute Rs. 1000 per year afterwards. The frequency of every investment should be 1 per year.
2. Tier 2 Account: When opening an account, you have to make a minimum contribution of Rs. 1000, and there is no need to make any contribution every year. The minimum investment for every contribution is Rs. 250.

Conclusion

The National Pension System is important for every working professional. This can guarantee both financial stability and security after retirement. This government-sponsored scheme provides a systematic and structured way to grow funds for golden years.

If you wish to invest in NPS, you can easily do so from its authorised platform or ICICI Bank, which can help you make online NPS contributions. However, it's advised to gain more information about the National Pension System before making any contribution.

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