The contribution made in the National Pension System (NPS) can help you go through the tough time and old age easily since the money invested in debt, equity and government bonds give dividends and is returned to you in form of annual money and lump sum. The widespread perception among NPS subscribers is that the subscribers are allowed to withdraw the whole amount only at the time of superannuation, but not before. However, one can make partial withdrawals only if the subscriber has been contributing for a minimum of three years.
To ease 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 a 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
- In case of superannuation, any subscriber can claim 100 per cent withdrawal if the total accumulated money is less than or equal to Rs. 2 lakh at the time of the superannuating age of 60 years.
- In case of a premature exit, you can withdraw the total accumulated money if it is less than or equal to Rs. one lakh. However, you can exit from NPS only after completion of 10 years.
- 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.
- To be able to withdraw money from the NPS corpus, the subscriber should be in the NPS for a minimum of three years.
- The NPS withdrawal amount will not exceed 25 per cent of contributions made by the subscriber
- The withdrawal is allowed against the specified reasons which include higher education of children, the marriage of children, for the purchase/ construction of the residential house and for the treatment of critical illnesses.
- Partial withdrawal: The partial withdrawal request can be initiated only online by the subscriber. Alternatively, the subscriber can submit physical partial withdrawal form along with documents
- 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.
- 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.
- It is worth noting that in case of a premature exit, the pension starts immediately as long as the subscriber fulfils the age and corpus criteria.
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