Updated January 18th, 2024 at 17:48 IST
NPS Withdrawal New Rules: Key Updates You Need to Know - Details here
The Pension Fund Regulatory and Development Authority (PFRDA) has announced significant changes to the rules governing withdrawals from the National Pension
The Pension Fund Regulatory and Development Authority (PFRDA) has announced significant changes to the rules governing withdrawals from the National Pension System (NPS). These changes, set to take effect from February 1, 2024, bring noteworthy alterations to the withdrawal process for NPS account holders.
New Withdrawal Limit: Under the revised rules, no NPS account holder will be permitted to withdraw more than 25 percent of the total deposited amount. This includes contributions from both the account holder and the employer.
Partial Withdrawals Conditions: PFRDA outlines specific circumstances under which NPS account holders can make partial withdrawals. These include:
- Children's Education and Marriage Expenses: Withdrawal allowed.
- Purchase of a House: Withdrawal permitted.
- Medical Emergency: Withdrawal granted.
- Expenses Due to Disability: Withdrawal allowed.
- Skill Development: Withdrawal for skill development expenses.
- Starting a Startup or Business: Withdrawal facility available.
Conditions for NPS Withdrawal: To avail of the 25 percent withdrawal option, NPS account holders must adhere to certain conditions:
- Account Age Requirement: The account must be three years old.
- Withdrawal Limit: The amount withdrawn should not exceed one-fourth of the total amount.
- Frequency: Account holders are allowed a maximum of three partial withdrawals.
Withdrawal Process: To withdraw money from the NPS account, account holders need to follow a specific process:
- Submit Withdrawal Request: Account holders must initiate a withdrawal request.
- Provide Reason for Withdrawal: Information about the reason for withdrawal must be provided.
- CRA Processing: The Central Recordkeeping Agency (CRA) will process the withdrawal request.
- Verification Process: The money will be transferred to the bank account after the completion of the verification process, typically within a few days.
It is crucial for NPS account holders to familiarize themselves with these new rules and conditions to ensure a smooth withdrawal process. As of February 1, 2024, these changes will be in effect, impacting how individuals can access funds from their National Pension System accounts. Stay informed to make the most out of your NPS benefits.
Published January 18th, 2024 at 17:48 IST