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National Pension System Withdrawal Latest Rules: Ten Things To Know

NPS Withdrawal: The subscriber must have been investing for a minimum of three years to be able to withdraw money before superannuation.

NPS subscriber can exit the pension scheme only after completion of 10 years.

The contribution made in the National Pension System (NPS) can help you sail through the tough time and old age since the money invested in debt, equity and government bonds reaps dividends and is returned to you in form of annuity and lump sum. The wider perception among NPS subscribers is that the subscribers are allowed to withdraw the corpus only at the time of superannuation, but not before. However, one can make the partial withdrawals only if the subscriber has been contributing for a minimum of three years.

To widen the scope of NPS withdrawals, the Pension fund regulator PFRDA recently announced that the NPS subscribers will have the option to partially withdraw funds from their accounts for pursuing higher education or setting up new business. "Partial withdrawals will now be allowed to NPS subscribers who wish to improve their employability or acquire new skills by pursuing higher education/ acquiring professional and technical qualifications,"the PFRDA said in a statement.

 

NPS Withdrawals rules: Ten Things to know

1. In case of superannuation, a subscriber can claim 100 per cent withdrawal if the total accumulated corpus is less than or equal to Rs. 2 lakh at the time of superannuating age of 60 years.

2. In case of premature exit, you can withdraw the total accumulated corpus if it is less than or equal to Rs. one lakh. However, you can exit from NPS only after completion of 10 years.

3. There is a scope of conditional withdrawal. There are several conditions prescribed for the same.  For instance, a total of three withdrawals are allowed during the entire tenure of subscription.

4. To be able to withdraw money from the NPS corpus, subscriber should be in the NPS for a minimum of three years

5. The NPS withdrawal amount will not exceed 25 per cent of contributions made by the subscriber

6. The withdrawal is allowed against the specified reasons which include higher education of children, marriage of children, for the purchase/ construction of residential house and for the treatment of critical illnesses.

7. Partial withdrawal: The partial withdrawal request can be initiated only online by the subscriber. Alternatively, subscriber can submit physical partial withdrawal form along with documents

8. NPS offers two types of accounts - Tier I and Tier II. The Tier II National Pension System (NPS) account is just like a savings account and subscribers are free to withdraw the money as and whenever they require. The withdrawal restrictions apply only in the tier 1 account.

9. The subscriber can also check the NPS withdrawal status under the menu 'Exit Withdrawal Request'. Within this, there is 'Withdrawal Request status' view through their NPS account log in.

10. It is worth noting that in case of premature exit, the pension starts immediately as long as the subscriber fulfills the age and corpus criteria. 

What is NPS ?

NPS (National Pension System) is launched by Government of India, and regulated by Pension Fund Regulatory and Development Authority (PFRDA), as a defined contribution based Pension Scheme and provides following objectives

  • To secure old age sustainability of all citizens
  • Market based returns over long period of time
  • To ascertain regular income in old age

Investment in NPS Account

National Pension System provides the subscriber ease and flexibility to invest as per wishes as pension as well as investment under following types of accounts :

NPS Eligibility

Unique NPS Account may be opened voluntarily by every citizen of the country, whether resident or non resident, subject to the following conditions :`

Salient features of NPS

 

NPS is a dynamic scheme launched by the Government of India, to help all the citizens to plan their future as per their convenience. Its voluntary, highly flexible, easily portable, safe, low in cost and helps in achieving independence even after retirement.

NPS Tax Benefits

National Pension System is another tool in hand for planning your tax obligation. Taxes are important for the nation's development, but highly impact individual's budget. Government has understood the individual's requirements, and hence allowed various tax benefits under the present Financial Budget, so you may start saving today under NPS to attain independence on retirement.

National Pension System - Architecture

National Pension System (NPS) is an open architecture completely regulated by Pension Fund Regulatory and Development Authority (PFRDA). PFRDA is a statutory body constituted as per Pension Fund Regulatory and Development Authority Act passed on 19th Sept 2013 and notified on 1st Feb 2014. PFRDA has segregated different duties to separate entities, and has accordingly laid down the rules and regulations for all the entities.

NPS Calculator

 

NPS Calculator is designed to enable you to know how much Pension and lump sum amount you may get when you retire at 60. The calculator enables you in making decision about monthly contribution to be made towards NPS. Early you opt for NPS and more the money you invest in NPS will result in more accumulated amount and the larger will be the eventual benefit of the accumulated pension wealth.

The power of monthly compounding makes NPS an attractive retirement solution.

 

NPS Feature