HDFC Bank National Pension Scheme

What is HDFC Bank NPS?

HDFC Bank's NPS account lets you invest in equities, corporate bonds, and government securities based on your risk preference, making it the best pension plan in India. You can either make your own investment choice (Active Choice) or allow the system to allocate funds automatically based on your age (Auto Choice). This guide will help you understand how to invest in HDFC Bank NPS, its eligibility criteria, and the benefits of investing in NPS.

Brief Overview: Understanding NPS Accounts

NPS accounts are classified in the following two categories:

Eligibility Criteria for HDFC Bank NPS

To open an HDFC Bank NPS account:
Your age must be between 18 and 60 years.

Contribution Requirements:

Benefits of HDFC NPS

Here are the major benefits of investing in the HDFC National Pension Scheme:

• Control: As an HDFC bank NPS subscriber, you have complete control over your fund choices and investment. It also ensures taking calculated risks and earning high returns.
• Flexibility: You also have the flexibility to choose an investment option, annuity option, fund manager, etc.
• Long-term Returns: The National Pension Scheme is a long-term investment wherein you get the advantage of compounding that ensures a high corpus upon maturity.
• Transparency: You can monitor your contributions and investment performance online.
• Tax Benefit: The NPS investment undoubtedly offers lucrative tax benefits. The tax benefit is subject to change as per the prevailing laws.

How to Invest in the HDFC Bank National Pension Scheme?

You can invest in HDFC Bank NPS through two methods:

1. Offline Method

   • Visit the nearest HDFC Bank branch (Point of Presence - Service Provider).
   • Obtain and complete the NPS application form.
   • Submit it along with the required KYC (Know Your Customer) documents.
   • After successful verification, your NPS account will be activated.

2. Online Method

   • Visit the official HDFC Bank website.
   • Click the ‘Apply for NPS' button.
   • Complete the application form with the required personal and financial details.
   • Choose your preferred NPS account type and investment strategy.
   • Submit PAN card details and proceed with payment.
   • After you have successfully submitted your HDFC NPS account will be opened online.

HDFC Bank NPS Charges at a Glance

Secure your retirement with the National Pension Scheme (NPS), a low-cost, government-backed investment option offering attractive interest rates and tax benefits.

National Pension Scheme (NPS) – Charges & Interest Overview

Charges by Bank - Point of Presence (POP)

CRA Charges

Fund Management Charges (FMC)

Documents Required for the HDFC National Pension Scheme

To apply for the HDFC Bank NPS, you need to provide the following documents:

• Identity Proof: Driving license, Aadhar card, Passport, PAN card, or voter ID.
• Proof of Address: Driving license, Aadhar Card, Passport, PAN card or Voter ID cards, Deed of Property Sale, Rent Agreement, or Utility Bills.
• Proof of Age: Driving license, Aadhar Card, Passport, Birth certificate, Voter ID card.

Tax Benefits Under HDFC Bank NPS

The HDFC National Pension Scheme not only helps you build a secure retirement corpus, but also comes with generous tax-saving advantages under three key sections of the Income Tax Act. Here's how you can benefit:

Section 80CCD(1): Employee's Contribution

Example:
Rahul's annual Basic + DA is ₹8,40,000.
10% of ₹8,40,000 = ₹84,000.
He can claim ₹84,000 as a tax deduction under Section 80CCD(1).
However, this ₹84,000 is part of the combined ₹1.5 lakh limit under Section 80CCD(1).
If Rahul has already invested ₹1.5 lakh in other options like PPF or ELSS, this NPS contribution won't provide additional benefits unless he adjusts those investments.

Tip:
Be mindful of your other 80C investments. To benefit from NPS under this section, ensure your PPF, ELSS, or LIC premiums don't exhaust the full ₹1.5 lakh limit.

Section 80CCD(1B): Additional Benefit

Example:

Rahul has already claimed ₹1.5 lakh in deductions via EPF and life insurance.

He then contributes ₹50,000 to his NPS account.

This entire ₹50,000 is deductible separately under Section 80CCD(1B), making it a valuable tax-saving addition.

Result:
Rahul's total tax deduction now becomes ₹2 lakh:

• ₹1.5 lakh under Section 80C (including 80CCD(1))
• ₹50,000 under Section 80CCD(1B)

Section 80CCD(2): Employer's Contribution

Example:
Rahul's annual Basic + DA is ₹11,00,000.
His employer contributes 10% of this = ₹1,10,000 toward his NPS account.
This entire amount is deductible under Section 80CCD(2), independent of the ₹2 lakh allowed under Sections 80CCD(1) and 80CCD(1B).

Note:
If Rahul is under the new tax regime and his employer contributes 14%, the deductible amount increases to ₹1,54,000—providing even greater tax benefits.

Summary

The HDFC NPS account is a smart and affordable way to do your retirement planning. It offers flexible investment options, low charges, and useful tax benefits, making it suitable for both salaried and self-employed individuals. With HDFC's reliable digital platform, managing your retirement savings becomes easier. If you're looking to build a secure future and save on taxes at the same time, opening an NPS account through HDFC could be a smart choice.