In this post, I’m going to discuss one aspect of NPS that I’ve received some questions about.
What to do if you have two NPS accounts
Given the number of inquiries I’m getting about this issue, it’s not uncommon to have two NPS accounts.
They got one through their employer. When they then read about an exclusive tax benefit of Rs 50,000 for investing in an NPS Tier I account under Section 80CCD (1B), they opened another NPS account either online or through a local PoP / PoP SP. Little did they know they were getting into trouble.
Note that you cannot have two NPS Tier I accounts (or two PRANs). PRAN stands for Permanent Retirement Account Number. However, you can have both Tier I and Tier II NPS accounts. So it’s perfectly fine if you have an NPS Tier I and an NPS Tier II account. The problem is when you have two Tier I NPS accounts.
Read: Frequent doubts about NPS
Read: NPS: Tax benefits and tax treatment when due
How do I close the second NPS account?
I made the following query with NSDL CRA from the eNPS portal
I have come across some people who accidentally opened two PRANs (two NPS Tier I accounts).
Since a person cannot have two PRANs, how do you fix the problem (and close one PRAN)?
Here is the answer from NSDL CRA.
Dear subscriber, dear subscriber
We would like to inform you that a participant cannot use two PRANs in NPS. Furthermore, participants who have two PRANs must send a deactivation request for a PRAN to the CRA. If you have two PRANs, you will be asked to provide your second PRAN. This enables us to resolve your request. Thank you for being our valuable subscriber.
What about the corpus in the second NPS account?
As you can see in NSDL’s answer above, there is no clarity on how to send the deactivation request. There is no specific format.
And of course, what about the accumulated corpus in the second report? Does the amount need to be withdrawn or can the amount be matched to your first NPS account?
I called NSDL CRA with this follow-up query.
I was told that:
- You have to submit an application to your PoP / PoP-SP Deactivate the NPS Tier I account (which you want to close) and merge the corpuses with the NPS account (which you want to keep).
- If you opened your account through eNPSyou can write directly to CRA (NSDL or Karvy).
When CRA receives your request, the amount in the second NPS account (NPS account you want to close) is transfer to the first NPS account (that you want to keep alive) and The second NPS account will be closed.
Your problem is not yet fully resolved
It’s never been that easy.
Be prepared for confused looks when you contact a PoP-SP representative to deactivate the NPS account. I’m not sure they’ll be ready to forward a random letter to the rating agency.
However, The good thing is that the CRA (NSDL or Karvy) are prepared for such requests (At least they don’t think it’s criminal to have two NPS accounts).
Therefore, I think you can bypass PoP-SP and ask NSDL directly in the eNPS portal (of course you have to register in the eNPS portal first).
You can easily make a complaint / request on the eNPS portal. If so, NSDL needs to respond and your problem should be resolved soon.
You can also call NSDL CRA on toll free 1800 22 2080. However, be prepared for a number of confusing answers. For example, I was originally told that the subscriber would need to close the first account by withdrawing from the second NPS account. It wasn’t until I countered that the NPS account could not be closed 10 years ago that I received the correct answer.
Here are the latest NSDL CRA contact details: https://npscra.nsdl.co.in/contact-us.php
Here you can access the Grievance Redressal Policy for CRA under NPS.