NPS partial withdrawal rules
On pre-mature exit or premature closure, full money is not available in hand. If you close the account before retirement or 60 years, then the annuity will have to be bought from 80 percent of the total money deposited in the pension fund. Regular and monthly pension will be given from this annuity.
National Pension System (NPSThere is a scheme to give pension to the employees after retirement. Normally, you cannot withdraw money from NPS before 60 years or retirement. But there are some circumstances when you can get money from this pension fund in case of emergency. One can deposit a minimum of Rs 1,000 in a year in NPS and a maximum amount of Rs. There are two types of accounts in NPS (NPS Account), Tier 1 and Tier 2 accounts. Tier 1 is a complete retirement account from which there is no rule to withdraw money before 60 years. On the other hand, Tier 2 account allows you to withdraw (NPS Withdrawal) provides.
There is a belief about NPS that one cannot withdraw money from this account before retirement or 60 years. But this is not the truth. Just like in other schemes, the facility of partial withdrawal is available in case of emergency, similar facility is also available with NPS. However, there are some special rules, following which money can be withdrawn from NPS. For example, money can be withdrawn from NPS for self, children’s or wife’s/husband’s higher education, children’s marriage. Let us know in which situations you can withdraw money from NPS. According to the NPS website https://npscra.nsdl.co.in/all-faq-withdrawal.php money can be withdrawn under the following circumstances
- Member should be connected to NPS for at least 3 years
- Withdrawal amount shall not exceed 25% of the contribution made by the member
- Withdrawals can be up to three times during the entire subscription period
- Withdrawals are allowed only for certain reasons, for example, higher education of children, marriage of children, purchase/construction of residential house
- for the treatment of serious diseases
When can the account be closed
If an employee wants to withdraw from NPS, then there are certain conditions. According to the Pension Fund Regulatory and Development Authority, the lock-in period of NPS is 5 to 10 years. If a member wants to close the NPS account, then he will get this facility after 5 years of running the account. That is, you can close the NPS account only after 5 years. This is a rule for self-employed people. If you are salaried then you have to run the account for 10 years. Only after that you can close the account. This is called pre-mature exit.
On pre-mature exit or premature closure, full money is not available in hand. If you close the account before retirement or 60 years, then the annuity will have to be bought from 80 percent of the total money deposited in the pension fund. Regular and monthly pension will be given from this annuity. The rest of the money can be taken in the lumpsum. Keep in mind that if you are a salary earner, then the facility of exit from NPS is available only after 10 years. If the total amount deposited in the pension fund is less than or equal to 2.5 lakhs, then you get the full amount on closure of the account. If the member dies before retirement, then the total amount deposited in the pension fund is given to his nominee.
what to do to withdraw money
You can start the online process for partial withdrawal. There is also an option that you can submit the Partial Withdrawal Form (601-PW) along with the documents to the POP. Based on this the POP can initiate the online request. However, the POP is required to ‘authorize’ the withdrawal request in the CRA system. Only then will your money be able to withdraw.
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