Making the National Pension System or NPS (earlier New Pension Scheme) investments more lucrative, the government has enhanced the liquidity aspect and tax benefits in the retirement scheme. Now, up to three partial withdrawals of maximum 25 per cent each of the subscriber's contributions made on or after August 10, 2017 may be made out of the mandatory NPS Tier-I account after three years from making the contribution. However, the contributions made by the employer can't be withdrawn during the subscription period. Earlier, partial withdrawal was allowed only after 10 years after joining the scheme and subsequent withdrawals were allowed only 5 years after one withdrawal. The requirement of maintaining gaps between withdrawals has also been removed. Informing the Rajya Sabha on Tuesday, Minister of State for Finance Shiv Pratap Shukla, in a written reply, said, \u201cKeeping in view the possibility of sudden financial needs of the subscribers, the requirement of minimum period under National Pension System (NPS) for availing the facility of partial withdrawal from the mandatory Tier-I account of the subscriber has been reduced from 10 years to 3 years from the date of joining w.e.f. August 10, 2017. The minimum gap of 5 years between two partial withdrawals has also been removed w.e.f. August 10, 2017.\u201d Although, there is no restriction on withdrawals from the Tier-II account of the subscriber, withdrawals from Tier-I account may only be made for reasons like \u2013 (1) higher education of children; (2) marriage of children; (3) for the purchase\/construction of residential house; (4) for treatment of critical illnesses; (5) to meet medical and incidental expenses arising out of the disability; (6) for Skill development and (7) for establishment of own venture or any start-up. In its recent amendment on December 6, 2018, the government has made the entire 60 per cent commutation part of the mandatory Tier-I account, at the time of retirement at the age of 60 years, tax free. Earlier, only 40 per cent was tax free and 20 per cent taxable. The rule for remaining 40 per cent, however remains same, which has to be invested in a pension plan of any IRDAI-regulated insurance company. Also, tax benefits u\/s 80C has been extended to investments made in Tier-II accounts, provided the money can't be withdrawn before three years to avail the benefits. Moreover, additional deduction of Rs 50,000 is also available in a financial year u\/s 80CCD for investments made in Tier I account of NPS. In the same amendment on December 6, 2018, the government has also approved the following proposals pertaining to choice of Pension Fund and investment pattern for Central Government subscribers under NPS: Choice of Pension Fund: Central Government subscribers will be allowed to choose any one of the pension funds including Private sector pension funds. They could change their option once in a year. However, the current provision of combination of the Public-Sector Pension Funds will be available as the default option for both existing as well as new Government subscribers. Choice of Investment Pattern: The following options for investment choices will be offered to Central Government employees: Government employees who prefer a fixed return with minimum amount of risk may be given an option to invest 100 per cent of the funds in Government securities (Scheme G). Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes. Conservative Life Cycle Fund with maximum exposure to equity capped at 25 per cent at the age of 35 years and tapering off thereafter (LC-25). Moderate Life Cycle Fund with maximum exposure to equity capped at 50 per cent at the age of 35 years and tapering off thereafter (LC-50). In case an employee does not submit any choice, the existing allocation of funds shall continue as the default option.