NPS Tier 2 Activation Procedure Online and Offline | Is NPS Tier 2 Taxable?

NPS Tier 2 Activation online

NPS Tier 2 Activation Procedure

The NPS Tier 1 account is the default account that gets opened,
when you start an investment in the pension account.
Only those account holders who have a NPS Tier 1 account can open a Tier 2 Account.
NPS Tier 2, on the other site, is a voluntary account.
When you invest in Tier 2 accounts, it gets invested in dissimilar funds like a mutual fund.
Tier 2 come without lock-in period, which means the subscriber can withdraw the amount any time.
This account is helpful for those who want to make extra contributions to the existing Pension System, and build a massive corpus towards retirement.
Here is the step by step guide for NPS Tier 2 Activation.

A government employee can avail tax deduction u/s 80C for contribution to Tier 2 as well provided there is a lock-in period of 3 years.

Also Read Understanding The Background of “What is Tier 1 and Tier 2 in NPS”

Offline Procedure

Let’s see how one can open an Tier 2 account offline.

  1. NPS Tier 2 account has to be opened via the “Subscriber’s POP-SP” (Point of Presence – Service Providers).
  2. The Account holder needs to download the Annexure 1: Tier 2 Details form and send it duly filled to the POP-SP.
    To reach out to your nearest POP-SP, click here.
  3. You must share your bank account information to open a Tier 2 account because any withdrawals will be directly transferred to your bank account.

NPS Tier 2 Activation Online

  1. Visit eNPS website and then click on National Pension System.
  2. Next, you have to click on ‘Tier II Activation‘ option.
  3. Next, you need to submit 3 necessary information to get OTP.
    The 3 details are – Permanent Retirement Account Number (PRAN), Date of Birth and PAN Card number.
  4. Click on ‘Verify PRAN‘ to receive OTP on your registered mobile number.
    Write the OTP get on your mobile in the given space and then click on continue.
  5. Next, Fill up your bank account details and click on ‘Validate Aadhaar‘.
  6. You will get your Acknowledgement number (Reference Number). Click on OK button.
  7. Next, you will need to select a pension fund manager along with investment choice -Auto or Active.
  8. Then click on ‘Save and proceed’.
  9. Next, Enter your nominee information and click on ‘Save and proceed’.
  10. Next you need to upload 2 documents- scanned PAN card and a cancelled cheque.
  11. Once the documents are attached, click on ‘Upload’ button.
  12. Next, make payment towards the NPS Tier 2 NPS Account.
  13. You can open a Tier 2 account with a minimum investment of Rs. 1,000/-.
  14. Next, you will get your receipt for contribution to NPS Tier 2 Account.
  15. Now you need to e-sign the application using your Aadhaar details.
  16. Once you share your Aadhaar number, you will get an OTP on your registered mobile number.
  17. Submit the OTP.
  18. Once you have e-signed your application successfully,
    you can download your application, put your signature on the downloaded form and send it to the NSDL office via registered post.

Address to Send Activation Form

AddressNSDL e-Governance Infrastructure Limited
1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013
Tel(022) 2499 3499
Fax(022) 2495 2594/ 2499 4974

Also Read NPS Tier 2 Returns | NPS Tier 2 Tax Benefit 2021

Is NPS Tier 2 Taxable?

Only central government employees are eligible for tax benefits.
Non government employees contributions to the Tier 2 accounts will continue to remain free from lock-in but will not get tax deductions.

The Government employee’s contribution towards Tier 2 for availing income tax deduction u/s 80C of the Income Tax Act, 1961 (up to ₹1.5 lakh) per year will have a lock-in period of three years.