Section 80 Deductions - Income Tax Deductions under Section 80D

Posted by Rushabh H. Mehta | Published on 06 Mar 2020
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Section 80 Deductions - Income Tax Deductions under Section 80D

Health is wealth goes a famous saying, and it is quite right. You cannot live a fulfilling life if you don't take of your health. In today's times, medical expenses have become quite unaffordable, and with medical inflation steadily on the rise, the costs are expected to increase. Meeting such high medical expenses might prove prohibitive for many, and that is why there are health insurance plans available in the market. Health insurance plans cover the medical expenses which are incurred in a health emergency. Besides providing financial assistance, health insurance plans also allow you tax benefits under Section 80D. Do you know how? Let’s understand –

What is Section 80D deduction?

The Income Tax Act, 1961, allows health insurance premiums to be claimed as a deduction under Section 80D. This deduction is contained under Chapter VI A of the Income Tax Act, 1961. Under Section 80D deduction, the premium paid for health insurance is allowed as a deduction from your taxable income.

Eligibility for availing 80D deductions

To avail deduction under Section 80D, the following parameters should be kept in mind –

  • 80D deduction is available for individual taxpayers and Hindu Undivided Families (HUFs). The deduction is not allowed to any other type of taxpayer.
  • Non-resident individuals can also claim deduction under Section 80D
  • The deduction can be availed only if the premium is paid towards a health insurance coverage
  • The coverage can be taken for self, spouse, dependent children and dependent parents
  • The amount of deduction available under Section 80D depends on the age of the member being covered under the insurance policy
  • The premium should not be paid in cash
  • Section 80D deduction is available even if you have claimed deductions under Section 80C on eligible investments and expenses, Section 80CCC on life insurance pension plan premium and Section 80CCD towards investments in the National Pension Scheme

Amount of deduction available under Section 80D

There is a maximum limit up to which deduction under Section 80D can be claimed. This limit, as mentioned earlier, depends on the age of the insured member. The limit of deduction available for taxpayers who are below 60 years of age is INR 25,000, and for senior citizens, it is INR 50,000. Moreover, if the taxpayer buys an additional policy for his dependent parents, he/she can claim additional deduction under Section 80D. Let's understand the allowed 80D limit under different instances –

Section 80D


Let’s understand the deductions with some examples – 

Example 1 – Mr. Sharma, aged 45 years, buys a health insurance policy for himself and his family by paying a premium of INR 20,000. He also invests in a health plan for his senior citizen dependent parents, and the premium paid is INR 30,000. The deduction available to Mr. Sharma under Section 80D would be INR 50,000, i.e., INR 20,000 for the premiums of his family floater health plan and INR 30,000 for the premiums paid for senior citizen parents.

Example 2 – Mr. Khurana, aged 30 years, buys a health plan for him and also covers his dependent senior citizen parents under the same plan. The premium paid is INR 32,000. In this case, the maximum deduction available to Mr. Khurana would be INR 32,000 since the plan also covers his senior citizen parents and so the limit of deduction becomes INR 50,000. Thus, the premium of INR 32,000 would be allowed as a deduction from Mr. Khurana’s income.

Example 3 – Mr. Verma buys two health insurance plans. One covers him and his spouse aged 34 years and 32 years respectively and the other covers his dependent senior citizen parents. The premium paid for his policy is INR 26,000, and for his parents' policy is INR 30,000. The deduction available would be limited to INR 55,000, i.e. up to INR 25,000 on his policy and INR 30,000 on his parents' policy. Thus, Mr. Verma would not be able to avail a deduction of the extra INR 1000 which he paid on his health insurance policy since the premium exceeded the available deduction limit of INR 25,000.

Deduction for preventive health check-ups

Section 80D also allows you a deduction towards the expenses incurred on preventive health check-ups in a financial year. So, if you undertake preventive health check-ups, you can claim the expenses incurred as a deduction from your taxable income under Section 80D. The limit of deduction is INR 5000, which is included in the limit of INR 25,000 or INR 50,000 as the case may be.

When you are planning your taxes, do remember the deduction is allowed by Section 80D, and if you have bought a health insurance policy or have invested towards preventive health check-ups, the expenses incurred would be allowed as a deduction, which would help in lowering your tax liability. For a hassle-free experience, IndiaNivesh experts can help you to choose the right products as per your goals and guide you on tax deductions as well.

 

Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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Dematerialisation of Shares – Meaning, Process & Benefits

Posted by Rushabh H. Mehta | Published on 06 Mar 2020

The online platform has revolutionised the way we live. Whether it is transacting, connecting with a loved one, getting updated about the happenings in the world, everything can be done online. When it comes to investments, the online platform provides ease and convenience. Investment in shares and share trading is a prevalent activity undertaken by many investors. They invest their money in the stock of a company with a view to earn profits when the stock value rises. When shares are purchased, share certificates are issued in physical form containing the details of the investor and the investor. However, these physical share certificates are inconvenient, and so the concept of dematerialisation has been introduced. Do you know what it is? What is dematerialisation? Dematerialisation of shares means converting physical shares and securities into an electronic format. The dematerialised shares and securities are, then, held in a demat account which acts as a storage for such shares. Dematerialised securities can then be freely traded on the stock exchange from the demat account. How does dematerialisation work? For the dematerialisation of securities, you need to open a demat account with a depository participant. A depository is tasked with holding shares and securities in a dematerialised format. As such, the depository appoints agents, called, Depository Participants, who act on behalf of the depository and provide services to investors. There are two licensed depositories in India which are NSDL (National Securities Depository Limited) and CDSL (Central Depository Services (India) Limited). Need for dematerialisation of shares Dematerialisation of securities was needed because it became difficult for depository participants to manage the increasing volume of paperwork in the form of share certificates. Not only were there chances of errors and mishaps on the part of the depository participant, but physical certificates were also becoming difficult to be updated. Converting such certificates into electronic format frees up space and makes it easy for depository participants to track and update their investor's stockholding. Benefits of dematerialisation for investors As an investor, you can get the following benefits from dematerialisation – You don’t have to handle the physical safekeeping of share certificates. Since your investments are converted in electronic format, you can easily store them without the risk of theft, loss or damage You can access your online demat account and manage your investments from anywhere and at anytime The charges associated with the demat account are low. Depository participants change holding charges which are minimal and you don't have to pay any stamp duty on dematerialised securities Since no paperwork is required to be done, the transaction time is considerably reduced Given these benefits, dematerialisation proves advantageous. Nowadays, the practice of holding physical securities has become almost obsolete and buying through a demat account has become the prevailing norm for investors. How to convert physical shares to demat? To convert physical shares to demat, the following steps should be followed – You should open a demat account with a depository participant. A depository participant can be a bank, financial institution or a stockbroker who is registered as a depository participant with the two licensed depositories of India You would then have to avail a Dematerialisation Request Form (DRF) from the depository participant and fill the form Submit the form along with your share certificates. The share certificates should be defaced by writing ‘Surrendered for Dematerialisation’ written across them. The depository participant would, then, forward the dematerialisation request to the company whose share certificates have been surrendered for dematerialisation. The request should also be sent to Registrar and Transfer (R & T) agents along with the company The company and the R & T agents would approve the request for dematerialisation if everything is found in order. The share certificates would also be destroyed. This approval would then be forwarded to the depository participant The depository would confirm the dematerialisation of shares and inform the depository participant of the same Once the approval and confirmation is complete, the shares would be electronically listed in the demat account of the investor Buying securities in a dematerialised form If you are looking to buy stock in a dematerialized form, here the simple steps that you can take for the same – Choose your broker for buying the securities and pay the broker the Fair Market Value of the securities that you want to buy The payment would be forwarded by the broker to the clearing corporation. This would be done on the pay-in day The clearing corporation would, then, credit the securities to the broker’s clearing account on the pay-out day The broker would then inform the depository participant to debit its clearing account and transfer the shares to the credit of your demat account The depository would also send a confirmation to your depository participant for the dematerialisation of shares in your account. The dematerialised shares would then be reflected in your demat account You would have to give ‘Receipt Instructions’ to your depository participant for availing the credit of shares in your demat account. This is needed if you hadn’t already placed a Standing Instruction for your depository participant when you opened your demat account. Similarly, for sale of dematerialised shares, the process is opposite. Trading in stocks in a dematerialised format is simple, quick and convenient. It has also become the practice of the current market. So, if you want to buy or sell securities, open a demat account and start trading in dematerialised securities. Should you have any doubts, get in touch with the team at IndiaNivesh who will look into your requirement and lead you towards a quick resolution.    Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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TDS Refund Status – Know how to check TDS refund status

Posted by Rushabh H. Mehta | Published on 06 Mar 2020

After the end of each financial year, any income that you earn is subject to income tax. You have to club the income received from different sources and then pay a tax on such income at a prescribed rate. However, in some cases, tax is deducted from your income before it is credited to you. For instance, if you are a salaried employee, tax is deducted by your employer from your salary income, and then you get the net salary income in your bank account. Similarly, if you earn any interest income, rent, etc., tax might have been deducted on the income by the individual or the entity that is paying the income. This deduction of tax is called Tax Deducted at Source (TDS) because the tax is being deducted at the source from where the income is being generated. TDS is deducted by the deductor and submitted to the Government on your behalf. When you file your income tax return, you are required to record the actual income that you have earned, i.e. income before the deduction of tax. Thereafter, you have to calculate your gross taxable income and tax liability on the income. If your tax liability is lower than the TDS already deducted from your income, you are eligible for a TDS refund. What is TDS refund? A TDS refund is the process of getting a refund of the extra income tax that you have paid. TDS refund is applicable if the TDS deducted and deposited is higher than the tax liability that you incur. For instance, banks deduct a TDS of 10% from the interest that you earn from your fixed deposit account. However, if you are in a lower tax bracket of 5%, an extra 5% has been deducted from your interest income. This additional 5% can be, therefore, claimed by you as TDS refund. Claiming a TDS refund The process of claiming a TDS refund depends on the source of your income. The different instances of TDS refund and the process of claiming them are as follows – When a higher TDS is deducted from your salary income If the TDS deducted from your salary income is higher than the actual tax liability that you incur, you can file your income tax return and claim a refund of the excess TDS deducted. When filing your income tax return, mention the details of your bank account so that the TDS refund can be credited to your account at the earliest. Alternatively, if your taxable income falls below the threshold taxable limit, you can apply for a low or a Nil TDS Certificate and submit the certificate to your employer. The employer would then deduct TDS at a lower rate or not deduct it at all (if you have availed of a Nil TDS Certificate). The certificate can be applied with the Income Tax Officer of your jurisdiction in Form 13 as specified under Section 197 of the Income Tax Act. When you are eligible for TDS refund on your fixed deposit interest earnings If your income is below the taxable limit, you should submit Form 15G to the financial institution with which you maintain the fixed deposit account. The form should be submitted before the completion of the financial year. Once the form is submitted, TDS would not be deducted from your fixed deposit interest income. If, however, TDS is deducted even after the submission of the form, you can claim a TDS refund by filing an income tax return. If you are a senior citizen and want to claim TDS refund on your fixed deposits Section 80 TTB of the Income Tax Act, 1961 allows senior citizens to enjoy a deduction of up to INR 50,000 on the interest income earned from fixed deposit and post office deposit accounts. So, if your taxable income after claiming the deduction is below the threshold limit, you can submit Form 15H to the financial institution where the deposit account is maintained. The financial institution would, then, not deduct any TDS from your deposit interest income. However, if the TDS is deducted, you can claim a refund by filing an income tax return. Claiming a TDS refund online You can claim a refund of your TDS online by registering on the website of the Income Tax Department. After you are registered, download the refund form and fill it by providing the required information. You would have to submit your documents along with the form to verify the details entered. Once the form is submitted to the income tax department, an acknowledgement of the filed return and a number would be issued by the department. This number should be verified either through your digital signature or by generating an OTP on the number which is registered with your Aadhaar card. How to check TDS refund status? Once you submit the TDS refund form, the excess tax amount is refunded within 3 to 6 months depending on the time taken by the income tax department to verify your income tax returns. In the meanwhile, you can check TDS refund status to find out whether the TDS has been refunded or not. The different modes to check income tax TDS refund status are as follows – You can check online TDS refund status through the e-filing website of the income tax department. Visit https://www.incometaxindiaefiling.gov.in/home and log into your online account. Under 'My Account', you would find the option of 'Refund/Demand Status.' Click on the option, provide your PAN Card number and check online TDS refund status for the chosen assessment year The Government also sends you an email on your registered email ID stating the TDS refund status. You can, therefore, access your email for TDS refund status check. You can even call the helpline number of the Central Processing Centre of the income tax department at Bangalore for checking your TDS refund status. The number is 1800 4250 0025 Usually, the TDS refund is credited at the earliest. In case of a delay, however, the income tax department would be liable to pay interest on the delayed amount of refund @ 0.5% for every month (6% per annum) from the first day of April of the assessment year to the date on which the refund is granted as per the rules contained under Section 244A of the Income Tax Act, 1961. TDS is a mandatory deduction from your income but you can claim a refund if your tax liability is lower than the TDS already deducted. So, find out if you are eligible for a refund and file for it at the earliest. If you need some advice, you can always reach out to IndiaNivesh, and our team will help in understanding the applicable taxes as per your income and investments.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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  • TDS Refund Status – Know how to check TDS refund status
    Posted by Rushabh H. Mehta | Published on 06 Mar 2020

    After the end of each financial year, any income that you earn is subject to income tax. You have to club the income received from different sources and then pay a tax on such income at a prescribed rate. However, in some cases, tax is deducted from your income before it is credited to you. For instance, if you are a salaried employee, tax is deducted by your employer from your salary income, and then you get the net salary income in your bank account. Similarly, if you earn any interest income, rent, etc., tax might have been deducted on the income by the individual or the entity that is paying the income. This deduction of tax is called Tax Deducted at Source (TDS) because the tax is being deducted at the source from where the income is being generated. TDS is deducted by the deductor and submitted to the Government on your behalf. When you file your income tax return, you are required to record the actual income that you have earned, i.e. income before the deduction of tax. Thereafter, you have to calculate your gross taxable income and tax liability on the income. If your tax liability is lower than the TDS already deducted from your income, you are eligible for a TDS refund. What is TDS refund? A TDS refund is the process of getting a refund of the extra income tax that you have paid. TDS refund is applicable if the TDS deducted and deposited is higher than the tax liability that you incur. For instance, banks deduct a TDS of 10% from the interest that you earn from your fixed deposit account. However, if you are in a lower tax bracket of 5%, an extra 5% has been deducted from your interest income. This additional 5% can be, therefore, claimed by you as TDS refund. Claiming a TDS refund The process of claiming a TDS refund depends on the source of your income. The different instances of TDS refund and the process of claiming them are as follows – When a higher TDS is deducted from your salary income If the TDS deducted from your salary income is higher than the actual tax liability that you incur, you can file your income tax return and claim a refund of the excess TDS deducted. When filing your income tax return, mention the details of your bank account so that the TDS refund can be credited to your account at the earliest. Alternatively, if your taxable income falls below the threshold taxable limit, you can apply for a low or a Nil TDS Certificate and submit the certificate to your employer. The employer would then deduct TDS at a lower rate or not deduct it at all (if you have availed of a Nil TDS Certificate). The certificate can be applied with the Income Tax Officer of your jurisdiction in Form 13 as specified under Section 197 of the Income Tax Act. When you are eligible for TDS refund on your fixed deposit interest earnings If your income is below the taxable limit, you should submit Form 15G to the financial institution with which you maintain the fixed deposit account. The form should be submitted before the completion of the financial year. Once the form is submitted, TDS would not be deducted from your fixed deposit interest income. If, however, TDS is deducted even after the submission of the form, you can claim a TDS refund by filing an income tax return. If you are a senior citizen and want to claim TDS refund on your fixed deposits Section 80 TTB of the Income Tax Act, 1961 allows senior citizens to enjoy a deduction of up to INR 50,000 on the interest income earned from fixed deposit and post office deposit accounts. So, if your taxable income after claiming the deduction is below the threshold limit, you can submit Form 15H to the financial institution where the deposit account is maintained. The financial institution would, then, not deduct any TDS from your deposit interest income. However, if the TDS is deducted, you can claim a refund by filing an income tax return. Claiming a TDS refund online You can claim a refund of your TDS online by registering on the website of the Income Tax Department. After you are registered, download the refund form and fill it by providing the required information. You would have to submit your documents along with the form to verify the details entered. Once the form is submitted to the income tax department, an acknowledgement of the filed return and a number would be issued by the department. This number should be verified either through your digital signature or by generating an OTP on the number which is registered with your Aadhaar card. How to check TDS refund status? Once you submit the TDS refund form, the excess tax amount is refunded within 3 to 6 months depending on the time taken by the income tax department to verify your income tax returns. In the meanwhile, you can check TDS refund status to find out whether the TDS has been refunded or not. The different modes to check income tax TDS refund status are as follows – You can check online TDS refund status through the e-filing website of the income tax department. Visit https://www.incometaxindiaefiling.gov.in/home and log into your online account. Under 'My Account', you would find the option of 'Refund/Demand Status.' Click on the option, provide your PAN Card number and check online TDS refund status for the chosen assessment year The Government also sends you an email on your registered email ID stating the TDS refund status. You can, therefore, access your email for TDS refund status check. You can even call the helpline number of the Central Processing Centre of the income tax department at Bangalore for checking your TDS refund status. The number is 1800 4250 0025 Usually, the TDS refund is credited at the earliest. In case of a delay, however, the income tax department would be liable to pay interest on the delayed amount of refund @ 0.5% for every month (6% per annum) from the first day of April of the assessment year to the date on which the refund is granted as per the rules contained under Section 244A of the Income Tax Act, 1961. TDS is a mandatory deduction from your income but you can claim a refund if your tax liability is lower than the TDS already deducted. So, find out if you are eligible for a refund and file for it at the earliest. If you need some advice, you can always reach out to IndiaNivesh, and our team will help in understanding the applicable taxes as per your income and investments.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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  • NPS (National Pension Scheme) – Features, Benefits & How does it work
    Posted by Rushabh H. Mehta | Published on 02 Mar 2020

    Planning for retirement is an essential aspect of financial planning, and a growing number of investors today are realising the significance of making early investments to boost their retirement corpus. The National Pension Scheme is steadily gaining popularity among investors to meet their retirement needs. However, many investors still do not fully understand what an NPS is and what are the NPS benefits in retirement planning and are unsure if they should subscribe to an NPS. If you, too, are contemplating subscribing to NPS, then this simple guide will help you get an understanding of the NPS. What is NPS? National Pension System (NPS) is a defined contribution pension-cum-investment scheme sponsored by the government. NPS was launched in the year 2004 in January exclusively for government employees except for those in the armed forces, but later on, in 2009 became opened to all to encourage systematic investment savings among citizens so that they can have a regular income at old age.  National Pension System is a voluntary investment option that is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It is one of the cheapest market-linked retirement plans with a minimum contribution of Rs 6000 per annum. The investment can either be made as a lump sum or through minimum instalments of Rs 500 each month.  Features of the National Pension System NPS is portable across locations. So, it can be opened and operated from anywhere in India It is open to all Indian citizens, and the minimum entry age is 18 years, and the maximum age is 65 years. NPS account can be opened offline at any Point of Presence (POP) center with your KYC documents or online at enps.nsdl.com by linking your PAN card and Aadhaar number to your account  In NPS, the savings of the investors are pooled together and invested in PFRDA-regulated funds managed by professional fund managers in various diversified portfolios. Investors can choose an asset mix of government bonds, equity instruments, corporate bonds, and alternative investments depending on their risk appetite. There are two phases in NPS-1. NPS Accumulation Phase: This phase, you invest periodically during your working years to build the retirement corpus in a mix of asset classes depending on your risk appetite.2. Retirement or NPS Annuity (Pension) Phase: This phase part of your corpus is used to provide you with a pension after your retirement in the form of annuity Investments in NPS can be managed in two ways-1. Active choice- If you want to manage your funds actively 2. Auto choice- If you feel you lack the knowledge and expertise and allow a life-cycle based approach for fund management. NPS offers tax benefits to investors at the time of making contributions and even at maturity. How does National Pension System work? Once you open your NPS account, you are provided with a unique Permanent Retirement Account Number (PRAN), which remains valid throughout your lifetime. There are 2 tiers in the structuring of NPS. Tier-I account- It is a permanent account. Thus, the accumulations made in this account are deposited and then invested according to the desired asset allocation as per the portfolio chosen by you. Withdrawals from NPS are not permitted. A total deduction of up to Rs. 2 lakhs can be claimed by investing in NPS under section 80C and 80CCD. Tier-II account- It is a voluntary account, but you need to have an active Tier I account. You can make withdrawals from this account as and when you need it to meet any expenses.    NPS benefits: 1. NPS is a low-cost planNPS has an initial registration cost of Rs 200 and another Rs 40 to be paid for opening the account. Apart from this, you pay an annual account maintenance cost, which ranges from Rs 60 to Rs 95, and the value of each transaction is Rs 3.75. There is a nominal Pension Fund Manager (PFM) charge of 0.01% of the total AUM and custodian charges of 0.0032%. 2. NPS investments are managed by professional fund managersOne of the most significant NPS benefits is that it is managed by professional fund managers who have adequate knowledge and market expertise about markets and money management.  3. NPS is a highly regulated NPS is regulated by the PFRDA (Pension Fund Regulatory and Development Authority) and all the investments are regularly monitored and reviewed by NPS trust. 4. Keeps the retirement corpus intact as it is difficult to exitEven though NPS is a voluntary investment, the structure of NPS does not allow you to withdraw your corpus till you attain the age of 60. As the lock-in period is very rigid for the scheme, your retirement corpus is intact to meet your post-retirement requirements.   5. NPS tax savings for taxpayers is very useful in lowering their tax liability and enhancing returns NPS tax savings make it very lucrative for the accumulation of retirement corpus. NPS entitles you to tax benefits at the time of investing, on the gains made during the tenure of your investment, and also at the time of withdrawal. In short, NPS offers EEE tax benefits. You can claim up to Rs 1.5 lakh in a financial year under Section 80C. Moreover, an additional deduction of Rs 50,000 can be claimed under Section 80CCD(1B).   CONCLUSION  The National Pension System is an ideal investment choice for your retirement planning as it will help you to make systematic investments and provide you with the desired income post-retirement. Get in touch with our experts at IndiaNivesh for more guidance and assistance for your NPS investments.   Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing. 

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  • NPS Investment - How to Invest in National Pension Scheme (NPS)
    Posted by Rushabh H. Mehta | Published on 28 Feb 2020

    How to invest in NPS? Building a sufficient retirement corpus after you retire is necessary so that you can live a financially free life. To allow you to save for retirement, there are various investment avenues. The National Pension System (NPS) is one such investment avenue that enables you to build up a corpus for retirement. What is National Pension System (NPS)? The NPS scheme is an investment scheme wherein you can make annual investments until you reach 60 years of age. The investments done into the scheme are invested in the market, allowing you market-linked returns. When the scheme matures, you can avail a part of the corpus in a lump sum while the remaining part pays you annuities, thereby creating a regular source of income for your retired life. Who can choose NPS investments? NPS investments can be made by individuals between 18 years to 60 years of age. The individual can be a resident Indian or a NRI. In the case of NRIs, though if the citizenship of the individual changes during the duration of the scheme, the scheme would be closed. How to invest in NPS? You can invest in an NPS scheme either through an authorized bank or non-banking financial company (NBFC). Currently, most banks and certain NBFCs allow their customers to invest in an NPS scheme through them. These authorized banks and NBFCs are called Point of Presence (POP). Each authorized POP has a licensed branch for accepting NPS investments from customers. Such authorized branches are called Point of Presence Service Providers or POP-SPs, and you can approach such branch and open a NPS account for investment. How to invest in NPS online? With the online medium becoming popular, investing in NPS schemes are also allowed online. For online investments, you can use the net banking facility offered by your bank account. You can log into your bank account and choose to open a NPS account with your bank. You can deposit money through your savings account into the NPS account and start NPS investments. Alternatively, you can invest in NPS online through the scheme’s official website. The steps for online investment through the official website is as follows –• Visit the website https://enps.nsdl.com/eNPS/NationalPensionSystem.html and choose ‘National Pension Scheme’• To invest, you would have to register on the website.• To register, fill up the online application form providing all the relevant details like your name, age, citizenship, address, type of investor, bank account from which      investments into the scheme would be made and your PAN card number• Once the form is filled up and submitted, an acknowledgement number would be generated.• A Permanent Retirement Account Number (PRAN) would also be generated. This number would be your NPS account number• Once you e-sign the registration form and submit it, your registration would be complete• After successful registration, you can log into your account and start NPS investments. You would have to provide your PRAN number, the type of NPS account in which you want to contribute and the amount of such contribution A simple process, isn’t it? NPS investment option When you invest in a NPS scheme, there are two investment options that you have. One is the Tier I account, and the other is the Tier II account. Let's understand what these options are –• Tier I Account: Tier I account is a compulsory account which you have to open if you invest in the NPS scheme. The account does not allow withdrawals unless you need money for specific reasons like for meeting marriage related expenses, for a medical emergency, for higher education, etc. The minimum investment in NPS Tier I Account is INR 500 to open the account. Moreover, in one financial year, you have to make an investment of at least INR 1000 in Tier I Account to keep the account operative. If the minimum investment in NPS Tier I Account is not made, the account is frozen. In that case, you would have to pay a penalty of INR 100 to unfreeze the account and make it active. Investments in Tier I Account can be done till you reach 60 years of age or till your close the account prematurely. • Tier II Account: Once you open a Tier I Account, you get an option to open a Tier II Account as well. Tier-II account is optional and can be opened if you want and only if you have a Tier I account in your name. The minimum investment required for Tier II Account is INR 250, and you can withdraw from the scheme as and when you want. This account is not rigid like Tier I Account. Things to remember about NPS investments Now that you know how to invest in NPS and the investment options, here are some important points for you to keep in mind –• You can open Tier I and Tier II account only once in your name. Moreover, one NPS account is allowed for one individual• To invest in NPS you would have to submit your identity proof, age proof, address proof, PAN card, Aadhar card, and passport-sized photos with the registration form to complete the registration and open the NPS account• Investments made into the NPS scheme are allowed as a deduction from your taxable income. You can claim a deduction under Section 80 CCD (1) if you are a salaried employee and contribute up to 10% of your salary and dearness allowance to the scheme. If you are a businessman, contribution up to 10% of your income can be contributed to the NPS scheme under this Section. This contribution is allowed as a deduction up to a maximum of INR 1.5 lakhs, and it includes deductions availed under Section 80C• If your employer contributes up to 10% of your salary and dearness allowance towards the NPS scheme, you can claim an additional deduction under Section 80 CCD (2) independent of Section 80C deduction. This deduction can be claimed both in the old and new tax regimes• You can claim an additional deduction of INR 50,000 if you invest in NPS over and above the deduction claimed under Section 80C, 80 CCD (1) and 80 CCD (2). This additional deduction is allowed under Section 80 CCD (1B). NPS investments are an attractive way to create a retirement corpus and you can even claim tax benefits on the investments done. With the facility of investing online as well as offline, you can choose to invest in the NPS scheme in any way which suits you and create a retirement corpus for yourself. For a better understanding, you can get in touch with our experts at IndiaNivesh for more guidance and assistance for your NPS investments.     Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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