Are you among those wanting to open National Pension System (NPS) account but find it tough due to Aadhaar-based KYC process? Here is relief for you! Taking a big decision, pension fund regulator PFRDA has confirmed that it has now allowed Aadhaar-based paperless KYC process for onboarding of new subscribers under the National Pension System (NPS).
The Pension Fund Regulatory and Development Authority of India (PFRDA) said it has permitted e- NPS/Points of Presence facilities to use offline Aadhaar of prospective subscribers with their consent for opening NPS accounts.
What’s the benefit?
– The Aadhaar-based offline paperless KYC verification eliminates the need to provide a physical copy of the 12-digit identifier.
– Under the new process, an applicant can download the password-protected Aadhaar XML file by accessing the UIDAI portal through eNPS?and share the same for his KYC.
– The facility can also be availed for opening NPS accounts through Points of Presence (POP), which are offering this facility.
– In this process, the KYC details are in machine-readable XML format, which is digitally signed by UIDAI allowing eNPS/ POPs to verify the demographic contents of the file and certify the same to be authentic.
– The identity and address of the applicant can be verified in the process.
Immediate activation of NPS account
“The process enables immediate activation of NPS account due to instant KYC verification and also facilitates the immediate deposit of NPS contribution by the subscriber,” PFRDA said.
NPS Income Tax Benefit
Contributions made towards NPS are eligible for an additional tax deduction under section 80CCD(1B) upto Rs. 50,000 which is over and above the Rs 1,50,000 limit of deduction available under sec 80CCD(1). In the Union Budget 2019, the tax exemption limit for lumpsum withdrawal on exit/maturity from NPS has been increased from the present 40% to 60% under section 10(12A) of the IT Act and the remaining 40% of the corpus is already tax-exempt as it is mandatorily utilized for annuity purchase.