NPS Withdrawal 2025: The National Pension Scheme is supposed to provide financial independence to people after they retire from their jobs by giving a pension every month. However, the unpredictable nature of life may bring about emergencies where money is needed immediately. Hence, the fund has provided options for liquidity through premature exit and partial withdrawals after satisfying specific conditions.
NPS Withdrawal 2025: When and how?
NPS allows early withdrawals in cases of severe economic distress during life-related emergencies, such as:
- Higher education for children
- Marriage expenses for a child
- Purchase or construction of a residential property
- Skill development or career advancement
- Starting a business or entrepreneurial venture
- Critical illnesses (cancer, kidney failure, organ transplant, etc.)
Medical costs due to disability or incapacitation
Key Conditions for Premature Withdrawal
- You may withdraw from the account after 3 years of opening the NPS account.
- The maximum limit of withdrawal from the corpus is 20% while the remaining 80% of the total corpus will have to be used to purchase an annuity (both taxable).
- If the total corpus is below Rs. 1 lakh, full withdrawal is allowed as long as the account is a minimum of 10 years old.
- Up to 25% of contributions can only be withdrawn partly, limited to a maximum of three withdrawals until the subscriber is 60 years old.
NPS Withdrawal After the Age of 60 and Retirement
As soon as you reach the age of 60, you are eligible to withdraw:
- A maximum of 60% of the corpus, free of tax.
- The remaining 40% must be utilized for the purchase of an annuity for the regular pension (taxable as per slab).
- For a total corpus equal to or less than Rs. 2 lakh, one can withdraw at maturity the total amount.
NPS Withdrawal in Case of Death of the Subscriber
In the case of the death of a subscriber, the entire accumulated corpus shall be paid to the nominee or legal heir. The documents required are:
- Original PRAN card
- KYC documents (ID & address proof)
- Duly filled withdrawal form with a stamped receipt
- Bank proof (cancelled cheque/passbook copy)
- Death certificate of the subscriber
- Birth certificate (if nominee is a minor)
Withdrawal from NPS: How To? Online & Offline Methods
You can process the NPS withdrawal either online or offline:
- Online Withdrawal: Log in to the NPS account at the NSDL CRA website using your PRAN ID and password.
- Offline Withdrawal: Submit the withdrawal form (downloadable from NSDL CRA or available at PoP centers) with supporting documents.
Frequently Asked Questions (FAQs)
1. Where can I find NPS withdrawal forms?
You can download them from the NSDL CRA website or collect them from Points of Presence (PoP).
2. What are the different types of NPS withdrawal forms?
Forms are categorized based on withdrawal type:
Superannuation (after 60)
Premature exit (before 60)
Partial withdrawal
3. What are the conditions for partial withdrawal from a Tier I account?
Account must be at least 3 years old.
Withdrawal is allowed only three times during the entire tenure.
Maximum 25% of your contributions can be withdrawn.
4. Can I withdraw from NPS online?
Yes, you can submit an online withdrawal request through the NSDL CRA portal.
5. Are NPS partial withdrawals tax-free?
Yes, 25% of contributions can be withdrawn tax-free under Section 10(12B) of the Income Tax Act.
6. What documents are needed for NPS withdrawal?
Withdrawal form
PRAN card
ID & address proof
Bank proof (cancelled cheque/passbook)
7. Can I make a partial withdrawal and continue my NPS contributions?
Yes, partial withdrawals do not affect ongoing contributions.