NPS Partial Withdrawal Rules: NPS is a government scheme. This scheme has been designed with the aim of providing retirement fund and pension in old age. It requires long term investment. But if someone needs money before retirement, do you get any facility of partial withdrawal in NPS? Know about it here.
NPS Partial Withdrawal Rules: NPS is a government scheme which has been designed for retirement. In this scheme, your deposited money is divided in two ways. 60 percent of the amount is given to you as pension fund after retirement, while 40 percent goes into annuity, which prepares your pension. Pension Fund Regulatory and Development Authority (PFRDA) operates this scheme. But suppose after starting an NPS account, you need money before retirement, do you get any facility of partial withdrawal in NPS? Know about it here.
In what situations can you make partial withdrawal
PFRDA had issued a circular regarding NPS partial withdrawal on January 12, 2024. It was said in this circular that NPS account holders can withdraw up to 25% of the amount from the personal pension account excluding the employer contribution. These rules have come into effect from February 1. Know here in which situations you can make partial withdrawal from NPS account-
- If you need money for higher education of your children, then you can make partial withdrawal from NPS.
- Account holders can also make partial withdrawal up to 25 percent for the marriage of children.
- Partial withdrawal can also be done for buying a house, home loan repayment etc., but if you or your spouse already have a house in your name, then you will not be able to avail this facility to buy another house.
- Money can be withdrawn from the NPS account for hospital stay and treatment expenses during serious illnesses.
- The amount can be withdrawn in case of accidental medical disability or disability.
- In case of serious illness, the amount can be withdrawn for hospitalization or treatment.
- You can also withdraw money for starting any kind of business, startup, skill development or any course.
It is necessary to fulfill these conditions for partial withdrawal
- NPS subscribers must be members for at least three years from the joining date.
- Amount can be withdrawn a maximum of 3 times during the entire subscription tenure. There must be a gap of 5 years between the three partial withdrawals.
- You can withdraw only 25 percent of your total contribution.
How can you withdraw money?
- To withdraw 25 percent or less amount under NPS, first you have to apply to any government nodal agency of NPS.
- Along with this application, you will have to give a self declaration about the purpose for which you are withdrawing the money.
- After this, the application will have to be submitted to the Central Recordkeeping Agency (CRA).
- Then the agency will process the application after verification.
- If the subscriber is ill, then a family member or nominee can make this request on his behalf.
