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Wednesday, October 27, 2021

National Pension System: NPS account has been frozen, make it operational again

 

National Pension System Account: There is no need for money after retirement, for this many savings schemes are available. The National Pension System (NPS) is one of them. NPS is an investment scheme of the Government and Pension Fund Regulatory and Development Authority (PFRDA) for government and private sector employees. In this, a lump sum retirement fund and later annuity benefit is available to the person when he reaches the age of 60 years after investing during the job period. Tax rebate is also available on deposits in NPS.

In order to take all kinds of benefits related to NPS, it is necessary to remain operational, that is, the account should not freeze. In fact, it is necessary to deposit minimum amount in an NPS account in a financial year. If it does not, the account freezes.

How much is the minimum amount?

Under NPS, two types of accounts are opened Tier-I and Tier-II. Tier-I is a retirement account, while Tier-II is a voluntary account, in which any salaried person can start investing on his / her behalf. Tier-II account opens only after Tier-I account is opened.

It is necessary to contribute a minimum of Rs 1000 in a Tier I account every financial year. At the same time, no minimum contribution is mandatory for Tier-II account. If the minimum contribution is not made annually to the Tier-I account and the Permanent Retirement Account Number (PRAN) is frozen, then the Tier II account will also automatically ‘freeze’.

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How to get National Pension System Account unfreeze?

To make the NPS account unfreeze, the Subscriber has to fill the Form UOS-S10 physically and submit it to the concerned POP-SP. A copy of the PRAN card will also have to be provided along with the form. To unfreeze a regular NPS account, the subscriber will have to pay a penalty of Rs 100 for every one year of the freeze along with a contribution of Rs 500 for the current financial year. In the case of Swavalamban accounts, a penalty of Rs 25 will have to be paid for every year of freeze with a contribution of Rs 500 for the current financial year. A penalty of 100 rupees is applicable for unfreezing Tier 1 or Tier 2 or both accounts.

POP means point of presence are entities like SBI, ICICI Bank, HDFC Bank etc. which are registered with PFRDA to act as a customer interface. The branch networks that POPs operate from are called POP Service Providers (POP-SP).

Where to get the form

For unfreezing the NPS account, the form can be obtained from the bank where the account exists or https://npscra.nsdl.co.in/download/non-government-sector/all-citizens-of-india/forms/UoS-S10A-Unfreezing%20of%20PRAN.pdf Can be downloaded from.

What next?

The details are recorded in the system after receiving the application, contribution and penalty for unfreezing the NPS account. After the information of the contribution is uploaded to the Central Recordkeeping Agency (CRA) and the verification is completed, the NPS account is activated again and the email is sent to the subscriber.

Take care

  • After submitting the application to keep the account unfreeze, keep the enrollment slip signed or stamped with the concerned POP-SP.
  • The POP charges fixed by the PFRDA will be applicable for the contract transaction.
  • Request for unfreezing of Tier 2 account can be submitted only when the Tier 1 account is active.
  • The CRA service charges prescribed by PFRDA will apply for the contract transaction.

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Source: www.financialexpress.com

Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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