NPS rule change: Contribution from bank card stopped in tier-2 accounts
NPS rule change: The Pension Fund Regulatory and Development Authority (PFRDA) has determined to cease the power of cost of subscription of contribution in tier-2 accounts of nationwide Pension System (NPS). The PFRDA made its determination public via an official notification dated third August 2022. So, after this determination of PFRDA, cost from bank card for tier-1 account of NPS will stay whereas cost from the bank card for tier-2 account isn’t any extra out there for the NPS account holders.
Informing about discontinuing the bank card cost in tier-2 NPS account, PFRDA round mentioned, “The Authority has decided to stop the facility of payment of subscriptions/contributions using credit card as a mode of payment in the Tier-II account of NPS. Accordingly, all PoPs are advised to stop the acceptance of credit card as a mode of payment for the Tier-II account of NPS with immediate effect.”
The PFRDA issued the round exercising its powers conferred below the Section 14 of Pension Fund Regulatory and Development Authority Act, 2013 to guard the curiosity of subscribers and to manage, promote and guarantee orderly development of the National Pension System and pension schemes to which the act applies.
However, cost from bank card for tier-1 account of the NPS will proceed. Credit card cost for funding in mutual funds or shares are usually not inspired as such funds contain over leveraging of excessive curiosity cash. For instance, NPS account holders choosing bank card cost must pay cost gateway cost of 0.60 per cent. The over-leveraging goes additional increased once we add GST in it.
Things to find out about tier-2 NPS account
Tier-2 NPS account are voluntary and a Tier-1 NPS account is eligible for opening a tier-2 NPS account. NPS account holders having a tier-2 account will not be eligible for claiming earnings tax exemption on investments carried out in tier-2 account. However, a tier-2 NPS account has versatile exit and withdrawal guidelines compared to tier-1 NPS account.
Apart from this, solely these NPS account holders can open tier-2 NPS account who’ve tier-1 account. One can open a tier-2 NPS account with a minimal funding of ₹1000. After that, the NPS account holder can contribute in NPS tier-2 account in a number of of ₹250 with none higher restrict.
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