NPS, or National Pension System, which was introduced on January 1, 2004 was thrown open to everybody in 2009. It is regulated by the Pension Fund Regulatory and Development Authority and is designed for accumulation of big corpus even with moderate contributions, thanks to the huge period of investment possible under the plan, which after the launch of NPS Vatsalya can be more than 7 decades.
The Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations 2015 allow NPS subscribers to go for partial withdrawals from their accumulated pension corpus. But it can be done only in some specific situations. These situations have been clearly mentioned in the rules.
What are the rules for NPS withdrawal in 2024?
Any subscriber can withdraw up to 25% of his/her contribution to the NPS account but it does not include the contribution that the employer firm makes. This withdrawal can be made for the following reasons only:
Treatment of ailment for diseases such as renal failure, cancer, primary pulmonary arterial hypertension, major organ transplant, multiple sclerosis, heart bypass surgery, aorta graft surgery, heart valve surgery, stroke, coma, total blindness, paralysis, Covid-19, myocardial infraction etc.
Higher education for the NPS account holder’s children. It includes a legally adopted, child.
Marriage of the son/daughter of the NPS account holder.
Purchase of apartment or building a house. However, the flat/house has to be in the name of the account holder, or jointly with the spouse.
Medical expenses or similar incidental expenses incurred by the NPS subscriber in case of physical disability.
Expenses incurred by the NPS subscriber to set up his/her own venture.
Expenses incurred by the NPS accountholder to acquire some new skill/developmental activities.
NPS withdrawal eligibility
Unless an NPS subscriber is at least 3 years old in the NPS system, he/she cannot withdraw any funds. What is to be noted that only 25% of the member’s own contribution can be taken out. One cannot touch either the employer’s contribution nor the returns generated by the investments in the NPS.
Also, any NPS subscriber is allowed to make premature withdrawals only thrice during the entire tenure of investment. In case there are more requests of particle withdrawal, only incremental contribution made by the NPS member from the date of the last withdrawal will be considered.
The NPS, or National Pension System, is the flagship scheme for pension in India which has recently been extended so that a parent can start retirement planning for a minor who’s only a few months old. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
