National Pension System (NPS) offers subscribers the flexibility of partial withdrawals under certain conditions. Here’s a breakdown of eligibility criteria, withdrawal limits, permissible reasons, and frequency of withdrawals:
Eligibility:
To qualify for a partial withdrawal, you must have been an NPS subscriber for a minimum of three years from either the date of enrollment or issuance of your Permanent Retirement Account Number (PRAN).
Withdrawal Limit:
Subscribers can withdraw up to 25% of their own contributions. However, withdrawals cannot be made from the portion of the fund contributed by employers in government or corporate NPS plans. Additionally, returns earned on contributions are not included in the 25% withdrawal limit.
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Permissible Reasons for Withdrawal:
Partial withdrawals from the National Pension System (NPS) are allowed for various purposes:
- Higher Education of Children: Funding college or university expenses for your children.
- Marriage of Children: Covering wedding expenses for your child.
- Purchase/Construction of First House: Buying or building your first home.
- Medical Treatment: Covering specified illnesses for yourself, your spouse, or your children.
- Disability or Incapacitation: Managing medical expenses due to disability or incapacity.
- Skill Development or Re-skilling: Investing in self-improvement or career advancement through training.
- Establishing a Venture or Start-up: Setting up your own business or start-up (only applicable to subscribers in the ‘All Citizens’ sector).
Frequency of Withdrawals:
Subscribers are permitted a maximum of three partial withdrawals from their NPS account throughout its tenure. This limit remains consistent regardless of the duration of the account’s maintenance. Therefore, subscribers should bear in mind that they can only make withdrawals up to three times during their membership period.
Key Points to Remember:
- A five-year gap is required between partial withdrawals, except when withdrawing for specified medical expenses.
- Subsequent withdrawals are limited to the additional contributions made since the last withdrawal.
