Credit card contributions to Nps Tier-2 accounts are no longer allowed


By CNBCTV18.com IST (Released)

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The PFRDA said it made the decision exercising its powers under section 14 of the Pension Funds Regulation and Development Authority Act 2013, “to protect the interests of policyholders and to regulate , promote and ensure the orderly growth of the national pension system”. ‘

The Pension Funds Regulatory and Development Authority (PFRDA) has stopped accepting credit card contribution payments into National Pensions System (NPS) Tier 2 accounts.

By official notification dated August 3, 2022, the regulator ordered all Points of Presence (PoPs) to immediately stop accepting credit card payments for all NPS Level 2 accounts with immediate effect.

Although the use of credit cards for payments in investment programs such as mutual funds or stocks was discouraged, the NPS was the only savings vehicle that continued to allow account holders to invest through the eNPS portal using credit cards.

Currently, NPS account holders using credit cards must pay 0.60% as a payment gateway fee to contribute to the NPS through this channel. The over-indebtedness increases when the GST is added to this amount.

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The PFRDA said it made the decision exercising its powers under section 14 of the Pension Funds Regulation and Development Authority Act 2013, “to protect the interests of policyholders and to regulate , promote and ensure the orderly growth of the national pension system”. ‘

Who can have NPS Level 2 accounts?

The NPS was initially launched for government employees in January 2004 and then opened to all sections in 2009. There are two types of NPS accounts – Tier 1 and Tier 2.

In a level 1 account, the contributor can make a minimum payment of Rs 500 for opening the account. The account holder may also receive tax benefits under Section 80CCD(1B) of the Income Tax Act 1961.

An NPS Tier 2 account is voluntary and only those who have an NPS Tier 1 account can open an NPS Tier 2 account. The minimum contribution for this account is Rs 1,000 and must be made in multiples of Rs 250, without upper limit. NPS Level 2 account holders are not eligible to claim an income tax exemption on investments made in these accounts. However, compared to Level 1 accounts, NPS Level 2 accounts offer more flexibility in terms of withdrawal and exit.

How to make payments?

NPS subscribers can make contributions online at https://enps.nsdl.com/eNPS or through the NPS mobile app. They can use their debit card or online banking facility. Subscribers can also visit the POP-SP or affiliated nodal office to contribute.


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