Axis Bank NPS (National Pension Scheme)

What is the Axis Bank National Pension Scheme?

The Axis Bank National Pension Scheme (NPS) is a voluntary, long-term retirement savings initiative designed to help individuals build financial security after retirement. It provides professionally managed funds, tax advantages, and flexible investment choices. Axis Bank, authorised by the PFRDA, helps subscribers with account registration, fund allocation, and annuity plans. It’s an ideal solution for those seeking a structured and secure approach to retirement planning.

NPS Calculator

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18 Years 59 Years

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₹500 ₹10L

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Expected Return on Investment

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5% 15%

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40% 100%

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Expected Return from Pension

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5% 15%

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Maturity Amount split (Lumpsum & Pension)

60%

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At the age of 60 Yrs

40%

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Features of Axis Bank NPS

The National Pension Scheme (NPS) offers a range of flexible, cost-effective, and transparent features designed to suit the retirement planning needs of diverse investors. Below are some of the key highlights:

• Low-Cost Investment Option: NPS is a cost-effective retirement plan. The minimum initial contribution for a Tier-I account is ₹500, and the minimum yearly contribution required is ₹1,000.
• Regulated Scheme: NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring transparency and oversight.
• Flexible Contributions: You can contribute any amount above the minimum as per your financial capacity, offering flexibility in savings.
• Choice of Investment: Investors have the freedom to choose from various pension fund managers and a range of investment schemes to suit their risk appetite and retirement goals.
• Fund and Scheme Flexibility: The investor can select different scheme preferences, asset allocations, and pension fund managers for Tier-I and Tier-II accounts.
• Nomination Options: You can assign different nominees for Tier I and Tier II accounts, providing added flexibility in estate planning.
• Portability: NPS accounts remain operational across jobs and locations, making them ideal for working individuals who may change employers or move cities.
• Option to Change Investment Amount: You can increase or decrease your contribution amount during the year as per your convenience.
• Transparency: Regular account statements and online access ensure full transparency and allow subscribers to track their portfolio performance.
• Wide Range of Fund Choices: NPS offers an extensive selection of fund options, fund managers, and investment strategies, enabling personalised retirement planning.

Types of Axis Bank NPS Accounts & Applicable Charges

Who is Eligible for the Axis Bank National Pension Scheme?

To open an NPS account through Axis Bank, individuals must meet the following criteria:

• Age: Between 18 and 70 years at the time of application.
• Citizenship: Must be an Indian citizen, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs).
• KYC Compliance: Must fulfil KYC norms as specified by the PFRDA.

Top Reasons to Invest in Axis Bank NPS

• Build long-term wealth for retirement through disciplined savings.
• Enjoy tax benefits up to ₹2 lakh annually under various sections.
• Flexible contributions with no maximum limit.
• Track your portfolio online with Axis Bank’s portal or mobile app.
• No separate app required – manage everything through Axis NetBanking.
• Easy access and portability, even when switching jobs.
• Diversified asset allocation for balanced risk and returns.

Tax Benefits for NPS Contributions

The Income Tax Act provides tax deductions for contributions to the National Pension Scheme (NPS). These fall under three sections: 80CCD(1), 80CCD(1B), and 80CCD(2).

1. Section 80CCD(1): Arjun’s Own Contribution

   • Eligible individuals: Salaried and Self-employed
   • Deduction limit:
     • For salaried individuals like Arjun: Up to 10% of Basic + Dearness Allowance
     • For self-employed: Up to 20% of gross income
   • Maximum claimable amount: Falls within the ₹1.5 lakh limit under Section 80CCD(1)

   Example:

   • Arjun’s annual Basic Salary + Dearness Allowance = ₹18,00,000
   • 10% of ₹18,00,000 = ₹1,80,000
   • Arjun can claim ₹1,50,000 (since that’s the max within the ₹1.5 lakh cap)

   Note: If Arjun has already used the ₹1.5 lakh limit on other deductions (like LIC, ELSS, PPF), he won’t get this NPS deduction unless he reduces those.

2. Section 80CCD(1B): Additional Deduction for Arjun

   • Eligible individuals: All NPS subscribers
   • Deduction allowed: Up to ₹50,000
   • Separate from: The ₹1.5 lakh limit under Section 80CCD(1)

   Example:

   • Arjun has already maxed out his ₹1.5 lakh limit through investments like EPF, LIC, etc.
   • He contributes an extra ₹50,000 to NPS
   • This ₹50,000 qualifies separately under Section 80CCD(1B)
   • Arjun’s total deductions go up to ₹2 lakh

3. Section 80CCD(2): Arjun’s Employer Contribution

   • Eligible individuals: Employees receiving employer contributions to NPS
   • Deduction limit:
     • Up to 10% of salary under the old tax regime
     • Up to 14% under the new tax regime
   • Separate from: The ₹1.5 lakh limit under Section 80CCD(1)

   Example:

   • Arjun’s Basic Salary + Dearness Allowance = ₹12,00,000
   • His employer contributes ₹1,20,000 (10%) to his NPS
   • Arjun can claim the full ₹1,20,000 under Section 80CCD(2)
   • This benefit is in addition to the ₹2 lakh deduction available under Sections 80CCD(1) and 80CCD(1B)

How to Invest in Axis Bank National Pension Scheme? Step-by-step Guide

1. Online Process to Invest in Axis Bank NPS Account

   You can start investing in the NPS account through the eNPS portal by the Government of India. To invest online, your Axis Bank account must be linked to your PAN card. Additionally, you can also register for the net banking facility offered by Axis Bank to conveniently open and manage your NPS account online. Let's see the step-by-step process.

   Start your NPS journey by going to the eNPS portal and selecting ‘NPS’.

   • Click ‘NPS’ and begin registration.
   • Fill in basic details: name, address, PAN, mobile, DOB, and email.
   • Complete OTP verification using your PAN-linked mobile
   • Choose between Tier I (mandatory) or Tier II (optional)
   • Select a Pension Fund Manager (PFM)
   • Choose Auto Choice (age-based allocation) or Active Choice.
   • Add nominee details
   • Upload KYC documents (PAN, Aadhaar, proof of address)
   • Make the first contribution online.

   Once the payment is done:

   • A PRAN (Permanent Retirement Account Number) is generated
   • Download the form, affix a photo, sign, and send it along with self-attested KYC documents to the Central Recordkeeping Agency (CRA) within 90 days.

2. Offline Process to Invest in Axis Bank NPS Account

   To open an offline Axis Bank NPS account, follow the steps mentioned below: 

   • Visit your nearest Axis Bank branch.
   • Request and complete the NPS registration form
   • Attach a passport-size photo and required KYC documents.
   • Submit the form along with an initial contribution (via cheque or cash)
   • Post-verification, your PRAN will be issued.

   Once the form is submitted, the branch office will verify the details provided. After the completion of the verification process, the NPS account will be opened, and the subscriber will receive a PRAN (Permanent Retirement Account Number).

Documents Required While Opening an Axis Bank NPS Account

Here are the documents required while opening the Axis NPS account:

• Identity proof like a Passport, PAN Card, etc.
• Age proof like Passport, Voter ID, Aadhaar Card.
• Address proof like Aadhaar Card, Utility Bills, Driving License, etc.
• Scanned copy of the signature for the online mode
• Copy of cancelled cheque or passbook of your bank account.

Key Takeaway

The National Pension Scheme (NPS) offers a structured and flexible approach to retirement planning with attractive tax benefits and a variety of investment options. It provides individuals with the opportunity to secure their financial future through diversified investments, while also allowing flexibility in contributions and choice of fund managers. However, the limitations, such as taxation on annuity income and liquidity constraints, should be carefully considered. 

Overall, NPS is a reliable tool for long-term retirement savings, but it's essential to assess if it aligns with your financial goals and retirement needs.