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How to make an NPS Contribution?

To make a contribution to NPS through online or offline modes, an individual must have an NPS subscription and a Permanent Retirement Account Number (PRAN). The government sector employees are automatically enrolled in the National Pension System and are provided with the PRAN. On the other hand, private sector employees and self-employed individuals have to sign up voluntarily under the ‘All-Citizens’ model of the pension system. Upon successful registration, the individual gets a unique PRAN. Using this unique account number, the subscriber can contribute to the NPS scheme either via online or offline routes.

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How to make an NPS contribution online? 

To make a contribution to NPS online, you have to go to the e-NPS website. The following steps help in making online National Pension Scheme contribution:

  • Under the Nation Pension Scheme section, you have to select the contributions tab to contribute to the scheme.
  • In the Subscriber – Services Contribution form, you have to fill in the details such as PRAN, Date of Birth, NPS Subscriber type, OTP request, and enter captcha. Upon successful verification, an OTP will be sent to an email/mobile number.
  • The OTP is required to authenticate your permanent retirement account number.
  • Upon successful authentication, the online contribution page will open. A subscriber can make contributions to Tier i or Tier ii accounts. You can make NPS e payment using a debit card, or credit card, or internet banking facility.
  • Online payments attract NPS contribution charges. The eNPS POP charges a service charge of 0.10% of the contribution amount. The charge is subject to a minimum of INR 10 and a maximum of INR 10,000. However, this charge is not applicable to subscribers already registered with eNPS.

How to make an NPS contribution offline?

For offline NPS contributions, you must submit the National Pension Scheme Contribution Instruction Slip (NCIS) at the registered POP-SP. You have to use separate contribution slips for Tier 1 account and Tier 2 account. Following details have to be filled out in the form:

  • Subscriber Name, PRAN and contribution amount along with DD or cheque number.
  • Whether the subscriber is a government employee with the date of joining, if it is before 1st January 2004.
  • All government employees who joined after 1st January 2004 can only make Tier 2 account contributions using the NCIS slip.
  • For government employees joined before 1st January 2004, they can make offline contributions to Tier 1 and Tier 2 accounts.
  • Also, in case of cash deposits exceeding INR 50,000, a PAN card copy must be submitted along with the contribution form.
  • For all offline contributions in cash or DD or cheque, the OPI-SP service charges are 0.25% of the contribution amount. A minimum charge of INR 20 and a maximum charge of INR 25,000 per transaction.

How to download NPS contribution form?

To download the National Pension Scheme contribution form, you need to visit the NSDL website. Click here to visit the NPS forms page. Under the NPS account maintenance, you need to select the first form, NCIS: NPS contribution slip. The form will automatically be downloaded in word format. You can make changes to the word documents and fill the form and submit it online or print it to submit it offline at a POP-SP.

What are the charges for NPS contributions online?

Online NPS contribution attracts certain NPS payment gateway charges and online contributions charges. Following are the details of NPS online contribution charges:

  • Internet Banking: The charges per transaction is INR 0.60, excluding GST. The settlement of this occurs through the BillDesk gateway. The charge is irrespective of the amount contributed under NPS.
  • Debit Card: The applicable charges per transaction are 0.80% (excluding GST) of the transaction amount.
  • Credit Card: The charges for NPS contribution through credit card per transaction are 0.90% (excluding GST) of the transaction amount.
  • In addition to the above payment gateways charges, the online transaction also attracts 0.10% contribution charges. For all payments made through NSDL or Karvy, a minimum of INR 10 and a maximum of INR 10,000 is charged per contribution.

Therefore, as per the above charges for National Pension Scheme contribution online, internet banking is the cheapest way to make online NPS contributions. Subscribers can choose between SBIePay or BillDesk as one of their payment gateways to process their online contribution transaction.

Things to remember while making an NPS payment

Following are the things to remember while making an NPS payment:

The minimum and maximum limit for Tier i and tier ii account

The minimum contribution amount for a Tier i account is INR 1,000 per year. A subscriber can contribute at any time during the financial year. Also, there are no restrictions as to the number of contributions per year. On the other hand, the Tier 2 account does not have any minimum contribution amount required yearly. In other words, contributions towards a Tier 2 account are options and not mandatory.

There is no limit on the maximum amount for a Tier 1 account. However, one claims tax benefits on contributions up to only INR 2,00,000 per financial year under Section 80C (INR 1,50,000) and Section 80CCD (INR 50,000). On the other hand, contributions towards a Tier 2 account does not have any tax benefits. Furthermore, the subscriber can claim indexation benefits while redeeming their long term investments from the Tier ii account.

The minimum contributions amount for online contributions is INR 500 for Tier 1 account and INR 250 for Tier 2 account.

Contribution for NRIs

To open a Tier 1 account, Non-Resident Indians (NRIs) have to contribute at least INR 500. Furthermore, they should also contribute at least INR 6,000 per annum to keep the account active. Also, there is no limit on the number of times an NRI has to contribute. However, the minimum amount per contribution is INR 500. NPS contributions can be made only through an NRE account or an NRO account.

Contribution for employers

As per the NPS scheme’s current rules, the government sector employees automatically get the contribution into their pension account by the government. Employer NPS contributions are not very popular among the private sector. However, it is allowed.

Irrespective of whether an individual is a government sector employee or a private sector employee, the employer contribution qualifies for tax benefits.

The tax-deductible limit is at 10% of the basic annual salary of the employee. Also, the employer’s contribution shall be considered part of the total annual tax deduction benefit of INR 2,00,000 under NPS.

The minimum age for a contribution

One can start contributing towards NPS from the age of 18 years and up to 70 years. The NPS account matures when the subscriber reaches the age of 60 years. However, they can extend it to the age of 70 years. Therefore, the subscriber can keep contributing towards the age of 60 years as well.

In the case of NRIs, the contribution age is from 18 years to 60 years.

Limit on number of contributions in a year

There is no limit on the number of contributions per year for both Tier 1 and Tier 2 accounts.

Frequently Asked Questions

How can I contribute to NPS online?

To make an online contribution to NPS, you have to go to the e-NPS website. Under the National Pension Scheme, select the Contributions tab. Under the Subscriber – Services Contribution form, you must enter all the details and verify their account to proceed.
Upon successful verification, you can contribute the desired amount through any of the NPS payment options: debit card, credit card or internet banking facility.

How to check NPS contributions?

You can check your NPS contributions and NPS statement online on the NPS website or through the UMANG app. For checking NPS contributions online, you have to login to your NPS account through the CRA website (Central Recordkeeping agency). Here, enter the username and password and login. After logging in, select the transaction statement and select the holding statement from the drop-down. The holding statement will give the accumulated balance in the NPS account. While the transaction statement will give details of each contribution made.

How can I transfer money from NPS to a bank account?

National Pension System subscribers have to apply for withdrawal by filling the appropriate withdrawal form. Upon completing the withdrawal procedures, the money from the NPS account will be automatically transferred to your bank account.

How many times can I contribute to NPS in a year?

There is no limit on the number of times a subscriber can contribute towards their NPS account in a year. However, you should make the minimum amount of contribution as required by the law.

Can I make an NPS payment through my bank net banking account?

Yes, you can make NPS payments online through their net banking account.