National Pension Scheme: These users cannot use credit cards to make payments
In 2004, the government established the National Pension Scheme (NPS). While initially limited to government employees, the NPS umbrella was expanded to include individuals working in the private sector in 2009.
FollowThe National Pension System (NPS) is a voluntary, defined contribution retirement savings plan designed to assist members in making the best decisions for their future through systematic saving throughout their working lives. The NPS is designed to help people develop the habit of saving for retirement.
At maturity, a subscriber may withdraw a lump sum payment equal to 40 per cent of their investment without paying taxes. Anything above 40 per cent will be taxed, with a maximum lump sum withdrawal of 60 per cent.
The National Pension System Trust is a specialised section of the Pension Fund Regulatory and Development Authority (PFRDA), which reports to the Indian government's Ministry of Finance. The National Pension System is a voluntary defined contribution pension scheme in India.
The Pension Fund Regulatory and Development Authority (PFRDA) recently discontinued accepting credit card payments for contributions to National Pension System (NPS) Tier-II accounts.
The pension regulatory body has directed all points of presence (PoPs) to stop accepting NPS contributions through credit cards for Tier II account holders in its August 3 circular.
"The Authority has decided to discontinue the ability to pay subscriptions/contributions via credit card in the Tier-II NPS account. As a result, all points of presence (PoPs) are advised to stop accepting credit cards as a mode of payment for the Tier-II account of NPS immediately," the PFRDA stated in a statement.
The pension regulatory body also stated that the decision was made under Section 14 of the Pension Fund Regulatory and Development Authority Act 2013.
Contributions to the NPS can be made using online banking options such as IMPS, NEFT/RTGS, and the newly introduced UPI.
In 2004, the government established the National Pension Scheme (NPS). While initially limited to government employees, the NPS umbrella was expanded to include individuals working in the private sector in 2009.
NPS Tier-I accounts are primarily intended for retirement savings; anyone can sign up with a minimum yearly contribution of Rs 500. Contributions to these accounts are tax-deductible under Section 80CCD (1B) of the Income Tax Act of 1961.
Account holders can withdraw up to 60 per cent of the corpus fund accumulated in Tier I accounts when they retire. The remaining 40 per cent, on the other hand, may be converted into annuity products that will be used to pay post-retirement pensions.
In contrast, NPS Tier II is an open-access account that anyone can open with a Tier-I account for a minimum investment of Rs 1,000.
Tier II subscribers can withdraw their corpus anytime, with no restrictions or caps. However, contributions and returns from these account types are not tax deductible.
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