National Pension System (NPS) plays an important role in accumulating funds for your retirement.
National Pension System (NPS) plays an important role in accumulating funds for your retirement. Due to the option of investing in the stock market, you can earn more returns in the long run through NPS. As far as income tax benefit is concerned, under Section 80C of the Income Tax Act, you can take advantage of a reduction of up to Rs 1.5 lakh. The second thing is that now NPS has come in the ‘EEE category.’ This means income tax will not be levied on money deposited, interest accrued and money received on maturity. Additionally, you can take advantage of the deduction of up to 50,000 rupees under Section 80CCD (1B).
If you want to get more returns on the funds being added for your retirement, then you can transfer your Employee Provident Fund (EPF) to the National Pension System (NPS).
How to transfer the EPF money into NPS
If you want to transfer your EPF money to NPS, you must have an active Tier-1 NPS account. You can open this account through the employer if it is applicable in your organization. Alternatively, you can open your NPS account by going to a Point of Presence (POP) or e-NPS portal. You can go to npstrust.org.in to open an account of NPS.
Apply for PF Transfer after opening NPS account
When your NPS account is opened, you can apply for EPF transfer to your current employer. After the application, your EPF will be transferred into the NPS account. However, there is also a process for this.
When your application is received then the PF Fund will start the process of transferring the PF money into NPS. After this, a check or demand draft will be issued in the name of NPS Nodal Office (in the case of a government employee). In other cases, this will be issued in the name of the PoP collection account.
Letter to the employer
The Provident Fund will inform the employer through a letter that the amount of the account is being transferred to the employee’s NPS tier-1 account. After this, the nodal office or POP (which has received a draft or check from the provident fund) will update the money in the employee’s Tier-1 account.
