How to change schemes in NPS
The New Pension Scheme (NPS) offers subscribers the option of investing their funds in three types of schemes: Fund E, which invests a maximum of 50% in equity; Fund G, which invests in bonds of central and state governments, and Fund C, which invests in corporate bonds. Investors can also go for auto choice, in which allocation to the three asset classes is done automatically in a predefined proportion based on the investor's age.
To manage the contributions, subscribers can choose a fund manager from the six appointed by the PFRDA. Investors have the option to change their scheme choices, which could be related to either the allocation of funds among various asset classes or to the fund manager. The change in scheme preference has to be registered by submitting the request in the prescribed format.
Form: The change request form can be downloaded from tinyurl.com/3pvn3oh. It is also available at all registered points of presence service providers (POP-SP).
Information: The subscriber has to provide the folio number and name for identification. The type of account (Tier I or II), pension fund manager (PFM) and the investment choice should also be mentioned.
Documents: A copy of the PRAN card has to be submitted along with the application for making the change in preferences.
Submission: The form has to be submitted at the POP-SP through whom the subscriber is registered with the central record-keeping agency. A fee of `20 is charged for processing an application.
Points to note
Contributions: Currently, the rules allow a subscriber to make contributions in both Tier I and II accounts every financial year. Separate forms: If the subscriber has both Tier I and II accounts and changes have to be made in both, then separate forms have to submitted.
Tax implications: A switch from one fund to another implies redemption from one fund and investment in another. This may lead to gains or losses, which will have taxation implications.
Source: Economic Times
Visitors who read this article also read:
|
Was this article useful? Subscribe to our newsletter to get daily updates in your email for free. |
|
|
Related posts:
