Introduction:
The National Pension System (NPS) is one of the most tax-efficient retirement schemes in India. With the dual benefits of long-term wealth building and additional tax savings, NPS is increasingly becoming popular among salaried individuals and self-employed professionals. Here’s a step-by-step guide on how to open an NPS account and make the most out of it in 2025.
🪜 Steps to Start an NPS Account:
Step 1: Choose How You Want to Open
- Online: Through eNPS portal (https://enps.nsdl.com)
- Offline: Visit a Point of Presence (POP), like a bank or post office
Step 2: Documents Needed
- PAN or Aadhaar
- Mobile number, Email ID
- Bank account details
Step 3: Register Online (eNPS)
- Go to NSDL eNPS Portal
- Select “Registration” → Provide Aadhaar/PAN
- Fill personal details and upload KYC
Step 4: Choose Investment Preferences
- Auto Choice: System picks asset allocation
- Active Choice: You decide the percentage for Equity, Corporate Bonds, and Government Securities
Step 5: Contribution
- Minimum ₹500 for Tier I
- Make payment via net banking, UPI, or debit card
Step 6: PRAN Generation
- You’ll get your Permanent Retirement Account Number (PRAN)
💡 Tax Benefits in 2025:
- Section 80CCD(1): Up to ₹1.5 lakh (part of 80C limit)
- Section 80CCD(1B): Additional ₹50,000 over and above 80C
✅ Total Deduction = ₹2 lakh
🤔 Should You Start NPS?
👍 Ideal for:
- Salaried employees looking to save more tax
- Long-term investors aiming for retirement corpus
- Risk-averse investors (Auto Choice option)
👎 Not ideal if:
- You need liquidity before 60
- You dislike locking money for the long term
📌 Summary:
| Feature | NPS |
|---|---|
| Min Investment | ₹500/year |
| Lock-in | Until age 60 |
| Returns | 8–10% approx. |
| Tax Benefit | Up to ₹2 lakh |
| Type | Retirement Corpus Builder |
Related Posts:
- Top 5 Tax-Saving Investments in India – 2025
- Best Retirement Plans in India – 2025
- ELSS vs NPS – Which is Better for You?
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