NPS withdrawal rules altered to cater to unexpected financial needs of subscribers

The minimum period for withdrawal has been reduced to three years and three partial withdrawals will now be allowed.


The Pension Fund Regulatory and Development Authority (PFRDA) has altered the withdrawal rules for subscribers of the National Pension System (NPS), so that they can deal with sudden financial requirements.

Earlier, the minimum period under NPS for availing partial withdrawal from Tier-I account of the subscriber was ten years. This has now been brought down to three years, with effect from August 10, 2017.

Earlier a minimum gap of five years was necessary between two partial withdrawals. Now, a subscriber can make three partial withdrawals during the period of subscription under NPS. No minimum time gap between two partial withdrawals is required.

Each withdrawal may however, not exceed 25 per cent of the contributions made by the subscriber, excluding the employer’s contribution. However, in case of Tier-II account, there is no withdrawal restriction.

The partial withdrawals from the Tier-I account under NPS are allowed in case of: higher education; marriage children (including a legally-adopted child); for the purchase or construction of a residence in subscriber’s name or in a joint name with legally-wedded spouse (not permissible if individual already has such a residence); for treatment of specific illnesses of the subscriber, legally-wedded spouse or children or dependent parents; for skill development/ self-development/re-skilling courses or activities; for establishment of own venture or any start-ups, and so on.

The facility can only be availed if the subscriber has been in the NPs for at least three years from the date of joining.

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