The Buyt Desk
The Pension Fund Regulatory and Development Authority(PFRDA) has relaxed the rules of National Pension System(NPS) withdrawal. In its bid to make NPS a lucrative investment PFRDA amended the withdrawal rule and raised the threshold limit of exit. Earlier the subscriber with a corpus of up to Rs 2 lakh was permitted the entire money without opting for an annuity. But with the new rule now the corpus of Rs 5 lakh can be withdrawn in one go without investing in annuity schemes. Let us have a look at the rules for the complete and partial withdrawal of NPS corpus.
The withdrawal rule for different government employees is different in NPS. It also varies in the case of NRIs and corporate employees.
Withdrawal Rule For Government Sector Employees On Retirement
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The individual has to invest a minimum of 40% of the amount in the annuity.
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An individual can postpone the lump sum withdrawal of the amount till the age of 70 years.
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If the accumulated corpus is less than Rs 2.5 Lakhs, complete premature withdrawal is allowed.
Withdrawal Rule For Government Sector Employees Who Takes Voluntary Retirement
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One should invest a minimum of 80%of the corpus in the annuity scheme.
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If the accumulated corpus is less than Rs 1 Lakh, complete withdrawal of the sum is possible.
Withdrawal Rule For Corporate Sector Employees or Citizen On Retirement
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A minimum of 40% amount should be invested in the annuity.
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An individual can postpone the withdrawal till the age of 70 years.
Withdrawal Rule For Corporate Sector Employees or Citizen Who Takes Voluntary Retirement
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The individual should have invested in NPS for a minimum of 10 years.
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The applicant should invest the 80 percent amount to buy the annuity.
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If the accumulated account is less than 1 Lakh, complete withdrawal is possible.
Withdrawal Rule For NRIs On Retirement
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One should invest a minimum of 40 percent amount in the annuity.
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If the corpus is less than Rs 2 Lakhs, complete withdrawal is possible.
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An individual can postpone the lump sum withdrawal of the amount till the age of 70 years.
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The annuity purchase is deferrable for a maximum of 3 years period at the time of exit.
Withdrawal Rule For NRIs Who Takes Voluntary Retirement
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The applicant should invest the 80 percent amount to buy the annuity.
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If the corpus is less than 1 Lakh, complete withdrawal is possible.
NPS Partial Withdrawal Rule
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An individual is allowed to make only three withdrawals during the tenure.
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The subscriber has to maintain a gap of five years between two withdrawals. In case of a medical emergency, a reduction in the time gap is allowed.
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An individual can withdraw up to 25% of the contribution toward the scheme.
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For partial withdrawal, the applicant must have contributed to NPS for three years in continuation.
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Partial withdrawal is allowed in cases like children’s education, marriage, house construction or buying, and medical emergencies.
