NPS: The rules for withdrawing money from the National Pension System (NPS) will change from 1 February 2024. The Pension Fund Regulatory and Development Authority (PFRDA) has issued new rules for withdrawing money from the National Pension System (NPS) in a circular. These new rules will come into effect from February 1.
NPS : The rules for withdrawing money from the National Pension System (NPS) will change from 1 February 2024. The Pension Fund Regulatory and Development Authority (PFRDA) has issued new rules for withdrawing money from the National Pension System (NPS) in a circular. According to the notification, partial withdrawal from NPS fund will be allowed on these reasons. Now NPS investors cannot withdraw more than 25 percent of their contribution. These new rules will come into effect from February 1.
You can withdraw money for these reasons
- Higher education and marriage of children, including legally adopted children.
- Purchase or construct a residential house jointly with the legally married spouse of the NPS member or subscriber. However, it should be the customer’s first home other than the ancestral property. Those who already own houses are not eligible.
- Treatment of Cancer, Kidney, High BP, Sclerosis, Coronary Bypass Surgery, Stroke, Major Organ Transplant, Graft Surgery, Heart Valve Surgery, Myocardial Surgery, Complete Blindness, Paralysis, Coma, Life-threatening accidents etc.
- Medical and other expenses due to disability or disability of the customer.
- Expenditure incurred for re-skilling, up-skilling or any other self-development work.
- Expenses incurred by a customer to set up a business or start-up.
Criteria for partial withdrawal?
At the time of partial withdrawal, the subscriber must have been an NPS member for at least three years and this money cannot exceed 25 percent of the subscriber’s total contributions. Employer contributions are excluded from the calculations. Also, partial withdrawal is allowed only of the amount contributed and not the returns received on it. A maximum of three partial withdrawals are allowed during the subscription period. After the first withdrawal, regular contribution is required from the previous withdrawal till the second withdrawal.
Partial withdrawal method
For partial withdrawal, customers will have to visit the Point of Presence (POP) or government nodal office and fill a self-declaration form. There will be a reason to withdraw money. It will be further processed through the Central Recordkeeping Agency (CRA).
If the person is suffering from any of the diseases mentioned, a family member can make a request on behalf of the customer. The POP will identify the beneficiary and the CRA will verify the customer information including bank account through ‘Instant Bank Account Verification’ process using penny drop process or other technology.
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