As per new rules, the withdrawal can be made from the NPS account for children’s education and marriage expenses with a maximum of three withdrawals during its tenure.
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The Pension Fund Regulatory and Development Authority ( PFRDA) has issued new guidelines for partial withdrawals under the National Pension System (NPS). It will come into effect from February 1.
The PFRDA circular released on January 12, stated that the subscribers of NPS can now make partial withdrawals for purposes such as higher education, marriage, residential house purchases and medical expenses. The partial withdrawal should not exceed 25 per cent of the subscriber’s total contribution to their pension account.
The circular also mentioned that the returns generated on the contributions shall not be eligible for partial withdrawal. The subscriber will be allowed to make a maximum of three withdrawals during its tenure. The subscriber’s NPS account must be three years old to become eligible for the partial withdrawal of up to 25 per cent.
The NPS investors are also allowed to make partial withdrawals for the purchase or construction of a residential house or flat. However, if the subscriber owns a residential house or flat which is other than their ancestral property then no withdrawal shall be permitted.
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In case of medical emergencies such as hospitalisation and treatment of chronic diseases such as cancer, Kidney failure, multiple sclerosis, heart-related surgeries, Covid-19 and life-threatening accidents, partial withdrawal is allowed to cover such expenses.
Subscriber can also partially withdraw from their NPS account for skill development or any other self-development activities. You can also withdraw up to 25 per cent of the deposited amount if you want to establish your own business or start-up.
Eligibility And Withdrawal Request
The investor should have been a member of the NPS for at least three years to become eligible for the partial withdrawal benefits. It should not exceed 25 per cent of the subscriber’s total contribution. Three partial withdrawals are allowed per subscriber. For subsequent partial withdrawals, only incremental contributions made by the subscriber from the date of the previous partial withdrawal shall be allowed.
The subscriber should submit their withdrawal request along with a self-declaration stating the purpose of the withdrawal. The documents need to be submitted to their respective Government Nodal Office.
