You can not use credit cards to pay :NPS rule change

The National Pension system (NPS) is a voluntary, defined contribution retirement financial savings plan created to help members make the better option for their future through methodical saving in the course of their working lives. The nps ambitions to help people expand the addiction of saving for his or her retirement.

A subscriber can also withdraw a lump payment of 40 percent in their investment at adulthood with out paying taxes on it. With a maximum lump sum withdrawal of 60 percent, anything above 40 percent might be taxed.

A specialized section of the pension fund regulatory and development authority (pfrda), which reports to the indian government’s ministry of finance, is the national pension system trust. In india, a defined contribution pension scheme that is voluntary is known as the national pension system.

The pension fund regulatory and development authority (pfrda) these days stopped accepting charge of contributions to national pension system (nps) tier-ii money owed through card.

In its august three circular, the pension regulatory body has directed all points of presence (pops) to stop accepting nps contributions via credit score cards for tier ii account holders.

“The Authority has decided to stop the facility of payment of subscriptions/ contributions using credit card as a mode of payment in the Tier-II account of NPS. Accordingly, all points of presence (PoPs) are advised to stop the acceptance of credit cards as a mode of payment for the Tier-II account of NPS with immediate effect,” the PFRDA said in a statement.

The pension regulatory body has introduced that the choice exercised the powers conferred below section 14 of the pension fund regulatory and development authority act 2013.

Contribution to nps can be made via online banking options such as imps, neft/rtgs and the newly inducted facility of upi.

The government introduced a pension cum investment scheme, nps, in 2004. Even as it changed into to start with for government personnel most effective, nps’s umbrella was extended to individuals working inside the personal sector in 2009.

The tier-i accounts of nps are mostly meant for retirement savings, wherein any person can sign on with a minimum yearly contribution of ₹ 500. Contributions to these debts are eligible for exemption below section 80ccd (1b) of the profits tax act, 1961.

Account holders can pick to withdraw as much as 60 percent of the corpus fund accrued in tier i accounts on the time of retirement. In comparison, the last forty according to cent amount may be transformed into annuity products in an effort to be used to pay submit-retirement pension.

However, nps tier ii is an open-access to account that may be opened through an individual who already has a tier-i account, with a minimal funding of ₹ 1,000.

The Tier II subscribers may withdraw their corpus at any point without any restriction or capping. However, the contribution and returns from these account types are not eligible for any tax exemption.