Kritika Gaur Learn about the rules and eligibility criteria for NPS withdrawal. Get all the information you need about limits and more with NPS withdrawal.
What is NPS?
NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under NPS, the individual contributes to his retirement account and his employer can also co- contribute for the social security/welfare of the individual.
A person can withdraw partial amount from his NPS (National Pension Scheme) savings account under some specific situations. Let us find out those conditions.
As per an ET report, you can only withdraw from the account after three years, which means you must have been an NPS subscriber for atleast three years from the date you joined or the date your PRAN (Permanent Retirement Account Number) got issued.
How much money can be withdrawn?
An NPS subscriber can withdraw 25% of his own contributions. If you are a part of government or corporate NPS plan, you can’t withdraw from that. Also the returns gained will not be counted in the 25% you can withdraw.
According to the Pension Fund Regulatory and Development Authority (PFRDA) partial withdrawals from NPS Tier I is allowed for the following reasons:
- Children’s higher education
- Children’s marriage
- Purchase or construction of residential accommodation. This can be in the investor’s name or jointly with the spouse. However, this is not applicable if the investor already owns a house.
- Treatment of critical illnesses for the investor, their spouse, children, or dependent parents. Examples of some critical illnesses are: Cancer, Kidney failure, Organ transplants, Heart surgeries like coronary artery bypass, graft surgery, heart valve surgery, etc. , Stroke, Coma, Paralysis and Serious accidents.
- To cover medical and incidental expenses if you’re disabled or incapacitated.
- For the expense incurred on skill development. Re-skilling or any other self-development activities, following PFRDA guidelines.
- To start any venture or start-up permitted by PFRDA guidelines.
How Often You Can Withdraw?
Partial withdrawal can be done at most three times during the entire tenure. This limit applies no matter what. So you should take care about the withdrawals.
