In this post, I will discuss an aspect of NPS about which I have received quite a few queries.
What to do if you have two NPS accounts?
Based on the number of queries that I receive on the issue, having two NPS accounts is not very uncommon.
They got one through their employer. Subsequently, when they read about exclusive tax benefit of Rs 50,000 for investment in 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 that they were getting into a bit of trouble.
Do note you can’t have two NPS Tier-I accounts (or 2 PRANs). PRAN stands for Permanent Retirement Account Number. However, you can hold both Tier-I and Tier-II NPS accounts. Therefore, it is perfectly fine if you have a NPS Tier-I and a NPS Tier-II account. The problem is when you have two Tier-I NPS account.
Read: Common Doubts about NPS
Read: NPS: Tax Benefits and Tax Treatment at maturity
How to close the second NPS account?
I raised the following query with NSDL CRA from eNPS portal
Dear Team,
I have come across a few people who have accidentally opened two PRANs (two NPS Tier I accounts).
Since a person cannot have two PRANs, what is the procedure to rectify the issue (and close one PRAN)?
Here is the response from NSDL CRA.
Dear Subscriber,
We wish to inform you that one subscriber cannot use two PRANs in NPS. Further, subscribers who have two PRANs has to send deactivation request of one PRAN to CRA. If you have two PRANs then you are requested to provide your second PRAN. It will enable us to resolve your query. We thank you for being our valuable Subscriber.
What about the corpus in the second NPS account?
As you can see in the above response from NSDL, there is no clarity about how to send the deactivation request. There is no specific format.
And of course, what about the accumulated corpus in the second account? Does the amount have to be withdrawn or the amount can be merged with your first NPS account.
I called up NSDL CRA with this follow-up query.
I was told that:
- You need to submit an application to your PoP/PoP-SP to deactivate the NPS Tier-I account (that you want to close) and merge the corpuses into NPS Account (that you want to retain).
- If you opened your account through eNPS, you can directly write to CRA (NSDL or Karvy).
When CRA receives your request, the amount in the second NPS account (NPS account that you want to close) will be transferred to the first NPS account (that you want to keep alive) and the second NPS account will be closed.
Your problem is not completely over
Well, things are never that simple.
Be prepared for puzzled looks if you approach a PoP-SP official for deactivation of NPS account. I am not sure if they will be willing to forward a random letter to the CRA.
However, the good part is that the CRA (NSDL or Karvy) are prepared for such requests (at least they don’t think it is criminal to have two NPS accounts).
Therefore, I believe you can bypass PoP-SP and raise a query directly with NSDL on eNPS portal (of course, you need to register on eNPS portal first).
You can simply raise grievance/enquiry on eNPS portal. In this case, NSDL will be forced to answer and your issue should get resolved fairly soon.
You can also call NSDL CRA at their toll-free number 1800 22 2080. However, be prepared for a number of confusing answers. For instance, I was initially told that the subscriber needs to close the first account by withdrawing from the second NPS account. Only when I countered that the NPS account can’t be closed before 10 years, did I get the correct answer.
Here are the latest NSDL CRA contact details: https://npscra.nsdl.co.in/contact-us.php
You can access Grievance Redressal Policy for CRA under NPS here.