NPS Withdrawal

About NPS Withdrawal

If you are an active subscriber to the scheme, you must know how to withdraw money from NPS.

Mandatory Online Withdrawal

PFRDA has made the online withdrawal process mandatory since 2016. You will receive communication from the Central Record-keeping Agency (CRA) six months before turning 60.

Communication From the CRA

After initiating the withdrawal claim, a claim ID will be  allocated for your request. Remember, the CRA will only process online claims.

How to Withdraw From NPS?

Download and complete the withdrawal form using your User ID & IPIN within 6 months before retiring.

NPS Withdrawal Rules

NPS withdrawal rules are based on the subscriber’s employer. They vary with different sectors and situations.

Govt. Employees on Retirement

Can withdraw the total amount if ≤ to Rs. 5 lakhs. Can extend the withdrawal till 70 years.

Govt. Employees on Retirement

Should use 40% of the amount in annuity plans and take the rest as a lump sum.

Govt. Employees on Retirement

Withdraw all funds if ≤ Rs. 2.5 lakhs. For amounts >Rs. 2.5 lakhs, withdraw 20% & buy annuity plans for 80%.

Death of the Govt. Employee

The legal heir or nominee receives the total amount if the subscriber dies before retirement.

Corporate Employees on Retirement

Withdraw all funds if ≤ Rs 5 lakhs. For amounts >Rs.5 lakhs, withdraw 60% and buy annuity plans for 40%. Can postpone withdrawal till 70 years.

Corporate Employees Opting for Voluntary Exit

Must have the account for at least ten years. Withdraw all funds if ≤ Rs 2.5 lakhs.

Corporate Employees Opting for Voluntary Exit

For amounts >Rs. 2.5 lakhs, withdraw 20% and buy annuity plans for 80%.

Death of the Corporate Employee

The nominee can withdraw the amount in a lump sum if the subscriber has expired.

Documents Required

Original PAN Card. An undertaking cum request form if you are eligible for complete withdrawal. Filled advance stamped receipt with your signature and the revenue stamp.

Documents Required

KYC documents. Bank passbook, bank certificate with proof of your name and number, bank’s letterhead, cancelled cheque, and IFSC code.

NPS Premature Withdrawal Rules Tier I

Premature withdrawal can be done after holding the account for at least three years. The guidelines differ based on the accumulated funds in your account.

Tier I Premature Withdrawal- Conditions

Less than or equal to Rs. 1 lakh - You can withdraw funds in a lump sum with the benefit of tax exemption.

Tier I Premature Withdrawal- Conditions

More than Rs. 1 lakh - You invest 80% of the funds on the annuity, and 20% is available for withdrawal, subject to income tax.

Premature Withdrawal in Tier II

NPS Tier II account is similar to a regular savings account as it lets you withdraw money at your convenience.

Premature Withdrawal in Tier II

You need to physically visit the point of presence(PoP) for the NPS Tier 2 withdrawal process.

Premature Withdrawal in Tier II

The lack of an online facility and only a few PoPs available make NPS Tier II withdrawal lengthy.

NPS as an Investment

NPS provides an easy & foolproof way to gather a sizable corpus for the post-retirement years.

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Earn 9 - 11%  Fixed Returns

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