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How to Link Aadhaar with NPS Account

The National Pension Scheme popularly known as NPS is a voluntary retirement scheme introduced by the government of India with an intention to promote savings amongst the salaried individuals towards the pension scheme which will yield benefit post retirement.

The scheme is designed to enable systematic savings throught out the work life of individuals.

How to link Aadhaar with National Pension Scheme online?

  • One has to follow the below-mentioned steps to link national pension scheme online with aadhar:
  • Login to your NPS account using credentials.

  • Click on the ‘Update Details’ option, proceed further and select a sub-menu option which states “Update Aadhaar/Address Details”.
  • Select the option which is described as “Add/Update Aadhaar number”
  • Now enter the aadhaar number.
  • You will be receiving an OTP from the UIDAI on your registered mobile number
  • After completion of OTP authentication, the Permanent Retirement Account Number (PRAN) will be linked to the NPS account that was used to login and thus your given aadhar number will be linked.

Please Note: The name mentioned in the Pension Fund Regulatory and Development Authority (PFRDA) should match with the name mentioned in the aadhaar card.

Procedure to Link NPS Account with Aadhar Online (For New Subscribers)

Step 1: Visit the official web portal of NSDL
Step 2: Now click on the “Registration” option
Step 3: Proceeding further, select the required details and enter your Aadhaar number in the given space and click on the ‘Generate OTP’ button.
Step 4: Select the disclaimer option with a Tick mark and then click on the ‘Proceed’ button.
Step 5: Now an OTP will be sent to your registered mobile number with Aadhar.
Step 6: Proceeding further, now enter the OTP in the provided space and click on the “Continue” option.
Step 7: Now fill in the NPS registration form and make the payment which will generate an acknowledgement number.
Step 8: Proceeding further, submit your registration details and generate your Permanent Retirement Account Number (PRAN)
Step 9: Now e-Sign the registration form to complete the NPS subscription process.

Points to remember while linking Aadhar with NPS

One has to keep the following points in mind at the time of linking Aadhar number with NPS Account:

  • The name of the individual mentioned in the Permanent Retirement Account Number and the one in Aadhar Card should match.
  • The mobile number of the individual must be registered with the Aadhar card to avail of this facility.
  • The subscriber has to follow the Aadhar – NPS linking process even if has submitted his/her aadhaar details at the time of subscription.
  • The Aadhaar seeding of the government employees will get completed only after the respective Nodal officer approves the request.
  • The Aadhaar – NPS linking process is carried out through Aadhaar OTP authentication method only.

Benefits of Linking Aadhar with NPS Accounts

  • The linking of aadhar with NPS account helps an individual to fulfil KYC norms instantly.
  • The opening of NPS account via online becomes easy with the help of Aadhar authentication.
  • E-KYC through aadhar number will save the subscriber’s time spent on paperwork and Aadhar OTP ensures real-time instant verification.
  • The government has issued guidance to NPS subscribers to link their accounts with Aadhaar to track financial transactions and to provide exemptions to taxpayers.

About National Pension System

The National Pension System or NPS is a voluntary pension scheme maintained by the government of India. It is similar to the Public Provident Fund (PPF) and Employee Provident Fund (EPF). As per this scheme, the maturity amount and the entire withdrawal amount is tax-free and does not attract any tax.

The scheme was started after the government of India decided to stop pension to all the government officials who joined services post-January 1, 2004. Initially, it was started only for the government employees, later it was opened for all the residents of India during 2009 and all the individuals who are aged between 18 and 60 can park their funds in the national pension scheme.

The National Pension System (NPS) is a voluntarily defined contribution pension system and is administered and regulated by the Pension Fund Regulatory and Development Authority which is created under the Act of Parliament of India.

The government of India on December 10, 2018, has made NPS an entirely tax free instrument in the country wherein the entire corpus is tax free at maturity and the 40% annuity also does not come under the tax bracket.

Any kind of changes in the NPS will be notified through changes in the Income Tax Act of 1961 and will happen through the Finance Bill.

What is an NPS?

The National Pension System, popularly known as the NPS. It is a systematic retirement and savings scheme for the senior citizens backed by the Indian government that allows individuals to create a substantial amount of reserve during retirement. The NPS is administered and supported by the Pension Fund Development and Regulatory Authority -PFRDA, which has recommended its subscribers to link NPS Aadhaar.The Indian government introduced NPS in 2004 mainly for the benefit of government employees and the same was extended to everyone in 2009. A member under NPS must open a single NPS account in which he must deposit a minimum of Rs.6000 per month.Aadhaar being an important identity document and NPS being another crucial aspect of an individual's hard-earned money, the Government of India has taken the initiative to link the aadhaar card to the account of pension.

Why is it important to link Aadhaar with NPS account?

NPS aadhaar link is a simple process in which a person with an NPS scheme can link their card details to their Aadhaar card. Therefore, by establishing an NPS aadhaar link, all the details of that individual will be stored in a central repository. And, hence, it will be easy to claim the pension when needed without too much paperwork and hassle. With KYC being the most crucial these days to prevent fraud and bogus people, by establishing an NPS aadhaar link, meeting KYC standards becomes much easier. Therefore, it is important to make an NPS aadhaar link.

 

FAQ's

Q: Is it mandatory to make an NPS Aadhaar link?

ANS: Yes, it is obligatory. Under the amendment of PMLA - Prevention of Money Laundering Act, Indian government guidelines. Accordingly, all existing members under the NPS must also submit their Aadhaar, like their PAN.

Q: What are the tax advantages applicable under the NPS?

ANS: A tax benefit of Rs.50,000 is allowed in addition to the Rs.1.5 Lakhs benefit which can be claimed as a deduction under Article 80CCE of the Income Tax Act 1961.

Q: Can I withdraw the fund from the NPS account?

ANS: Yes, you can withdraw. A partial amount of 25% is deductible from the reserve for any crisis and retirement situation.

Q: What are the relevant documents to submit if I want to open an NPS account?

ANS: The documents below must be submitted for opening an NPS account:

  • Completed Subscriber Application Form
  • Proof of identity
  • Proof of address
  • Proof of age and date of birth
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