NPS Alert! How to retire rich? All that you need to know about the National Pension System

NPS Account: It is the most simple of money-making operations for every working person on this country. And yes, if you are financially wise, you can retire a rich person too. NPS or National Pension System scheme is a scheme that not only helps an earning individual to accumulate wealth for his retirement but even saves income tax. The retirement-oriented investment scheme is a voluntary pension contribution system administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA). The NPS investment tool has been created through a parliamentary act.

Speaking on the NPS scheme Vishwajeet Parasar, Chief Marketing Officer at Bajaj Capital said, "NPS or National Pension System has two tiers of investment. Tier-1 is a compulsory and non-withdrawal account. It will attract income tax exemption while filing Income Tax Return or ITR.  However, an investor will have to invest at least Rs 1,000 in tier-1 account of his or her NPS account." He said that in case an investor fails to invest the minimum Rs 1,000 in one's NPS account, then one's NPS account will get frozen. 
Speaking on the tier-2 account in the NPS Parasar said that tier-2 NPS account is a voluntary account and money invested in the tier-2 NPS won't qualify an investor for the Income Tax benefit. There is no binding on regular investment in the tier-2 NPS account, said Parasar. 
Speaking on the NPS withdrawal rules Parasar said that after investing for three years, one can withdraw 25 per cent of the net amount invested in the NPS account.

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On how to open an NPS account, Parasar said that an investor needs to fill the PRAN application for his or her enrollment into the NPS. The investor needs to fulfill the KYC norms by submitting one's Aadhaar card number, PAN, address proof, photograph, scheme preference. After filling the PRAN application, one needs to submit that form at the nearest Point of Presence or POP Service Provider. After submitting the PRAN form at the nearest POP Service Provider, an investor's PRAN Card will come to the given address of the investor. The PRAN Card will be a proof that your name has been enrolled in the NPS scheme. It will carry all the details related to your NPS scheme.