NPS Tier 2 Account

Given below is the method to open an NPS Tier-II account online:

1. You will need to visit the eNPS website (https://enps.nsdl.com/eNPS/NationalPensionSystem.html).
2. Next, click on 'National Pension System'.
3. Once you click on 'National Pension System', a pop-up will appear. Click on 'Tier-II Activation'.
4. On the next page, you will need to enter your Permanent Retirement Account Number (PRAN), date of birth, Permanent Account Number (PAN), and the captcha.
5. Next, click on 'Verify PRAN'.
6. Once the PRAN details are verified with your Tier-I account, the Tier-II account will get activated.

2. Offline:

Individuals can open a Tier-II account only if they have a Tier-I account. Given below is the procedure to open a Tier-II account offline:

1. Subscribers will need to use the 'Subscriber's POP-SP' to open a Tier-II account.
2. Next, the subscriber will need to download the Annexure 1: Tier-II Details form (https://npscra.nsdl.co.in/download/government-sector/central-government/forms/C-023-15-NeGIL-CRA-NPS%20Form%20Annexure%201.pdf) and send the filled form to the POP-SP.
3. Bank details will also be submitted in order to open a Tier-II account. In case of withdrawals, the amount will be sent directly to the bank account.

How to Log into an NPS Tier 2 Account

The steps to log into an NPS Tier-II account are as follows:

Step 1: Go to the eNPS login page.

Step 2: If this is your first time visiting, click on the ‘Click here to generate or reset the password if you are a first time user’ option.

Step 3: To generate an OTP, enter your PRAN, date of birth, and captcha.

Step 4: Click on the ‘Submit' option.

Step 5: Your password will be verified once you enter this OTP.

Step 6: Return to the login screen and fill out the captcha, password, and PRAN.

Step 7: Click on the ‘Login’ button.

Features of NPS Tier 2 Account

Given below are the main features of the NPS Tier-II account:

1. It is not mandatory to have a Tier-II account in order to invest in NPS.
2. All members of the Tier-I account can open a Tier-II account.
3. It is mandatory to have a bank account to open a Tier-II account.
4. The minimum contribution at the time of opening a Tier-II account is Rs.1,000.
5. At least one contribution must be made in a year.
6. The minimum amount of contribution that must be made is Rs.250.
7. The minimum balance that must be present in the account is Rs.2,000.
8. Transfer of funds from a Tier-II to a Tier-I account can be easily done.
9. No NPS tax benefits can be availed under a Tier-II account.
10. Activation and transaction charges are to be paid by the subscriber.

Eligibility for NPS Tier 2 Account

In order to obtain an NPS Tier 2 Account, following is the eligibility criteria that needs to be fulfilled.

1. Any citizen of India, resident or non-resident can join the National Pension System and can obtain the NPS Tier 2 Account
2. An active Tier 1 NPS Account is a prerequisite of obtaining a Tier 2 Account
3. Individual needs to be 28-60 years of age on the date of submission of NPS form
4. Non Resident Indians are also eligible to register for the NPS scheme

Taxation Process of Funds in NPS Tier 2 Account

Unlike the Tier 1 NPS Account, the Tier 2 NPS Account does not qualify for tax rebate under section 80C of the Income Tax Act. This is because the NPS Tier 2 Account does not have a locking period for funds which the Tier 1 Account has. However, withdrawals are taxed according to the time at which the withdrawal is made. So withdrawals within a year of investment attract short-term capital tax while those after a year of depositing earn long-term capital tax. For debt funds it is 10% while for equity funds the tax applicable is nil.

Documents Required to Open Tier-II NPS Account

The only criteria required for obtaining NPS Tier 2 Account is an existing Tier 1 Account. Hence, the KYC documents are already submitted. These are -

1. Duly filled registration form
2. Identity Proof of applicant
3. Address Proof of applicant
4. Age or Date of Birth proof of the applicant

PRAN Card is the only valid document required for opening an NPS Tier 2 Account.

Benefits of NPS Tier II Account

The benefits of an NPS Tier II account are as follows:

1. A minimum balance is not required.
2. Since withdrawal is possible anytime, individuals can save daily.
3. There are no annual maintenance charges.
4. Transfer of funds to the Tier-I account is possible any time.
5. There are no charges for exiting the scheme.

1. Investment pattern from the Tier-I account can be chosen.

Grievance Redressal as per Regulation 31 of  PFRDA (Redressal of Subscriber Grievance) Regulations, 2015:

The details of the Ombudsman appointed are available on the PFRDA website – https://www.pfrda.org.in/

At present, Shri Narender Kumar Bhola has been appointed as the new Ombudsman in terms of the PFRDA (Redressal of Subscriber Grievance) Regulations, 2015.

Details of the ombudsman are as given below:

Shri Narender Kumar Bhola

Pension Fund Regulatory and Development Authority

B-14/A, Chatrapati Shivaji Bhawan,

Qutab Institutional Area, Katwaria Sarai, New Delhi- 110016

Chhatrapati Shivaji Bhawan,

Email ID: ombudsman@pfrda.org.in

Landline No.: 011 -26517507 (Ext : 188)