National Pension System withdrawal rules for government, private employees on joining NPS before or after age 60

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Updated: October 20, 2021 4:55 PM

At the time of exit from NPS, when the account matures, the NPS subscriber is allowed to withdraw a certain percentage of the corpus while on the balance there is compulsory annuity or pension paid to the subscriber.

when can i withdraw money from nps account, NPS withdrawal rules, government employees, non-government subscribers, National Pension SystemThe annuity calculator of NPS can be used by subscribers in the websites of CRAs like NSDL and Karvy Fintech.

Opening a National Pension System (NPS) account helps to save money for one’s retirement as it comes with mandatory pension options. On maturity, some portion of the NPS corpus can be withdrawn but are strictly as per the defined rules under NPS. For making an exit or for making withdrawal from an NPS account, PFRDA (Exits and Withdrawals under NPS) Regulations, 2015 and its amendments are to be looked at. For premature exit, normal exit and exit due to unfortunate death of the subscriber, there are certain predefined conditions which need to be met.

If you want to know when can one withdraw money from NPS account, read on to know the rules. At the time of exit from NPS, when the account matures, the NPS subscriber is allowed to withdraw a certain percentage of the corpus while on the balance there is compulsory annuity or pension till lifetime. The pension is to be received from life insurance companies or the Annuity Service Providers (ASP) empaneled by PFRDA. However, there is an exception and there are certain instances wherein the corpus in the PRAN is paid to the subscriber or the beneficiary by way of lump sum without mandating them to buy annuity. In such a case, there is no restriction for any NPS subscriber to buy annuity from the corpus partly or fully.

The annuity calculator of NPS can be used by subscribers in the websites of CRAs like NSDL and Karvy Fintech.

Exit norms are based on the following factors:

  • If you are joining before between age 18-60 or between age of 60 and 70
  • For how many years you have been NPS subscriber before exiting/ withdrawing
  • If you are a government employee or a non-government individual

I. NPS account opening 18-60 years

Category : Premature Exit (Exit before 60 years/Superannuation)

Government Sector

a. If the corpus is equal to or below 2.5 lakh, lump sum is payable.

b. If the corpus is higher than 2.5 lakh, at least 80% of the accumulated pension wealth has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber. The balance 20% is payable as a lump sum to the Subscriber.

Non – Government Sector

a. Be a Subscriber for 10 years.

b. Lump sum payable if the corpus is equal to or less than 2.5 lakh.

c. If the corpus is more than 2.5 lakh, at least 80% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity. The balance 20% is payable as a lump sum.

Category : Normal exit (60 years or beyond) & Superannuation)

Government Sector

a. Lump sum withdrawal allowed if the corpus is equal to or below 5 lakhs.

b. If the corpus is more than 5 lakhs, at least 40% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber. The balance 60% is paid as a lump sum.

Non – Government Sector

a. Lump sum withdrawal is allowed if the corpus is less than or equal to 5 lakhs.

b. If the corpus is more than 5 lakhs, at least 40% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity. The balance 60% is paid as a lump sum.

II. Subscribers who join NPS between 60-70 years

Non-Government Sector

a. If the corpus is equal to or below 2.5 lakhs, lump sum is payable.

b. If the corpus is higher than 2.5 lakhs, at least 80% of the accumulated pension wealth has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber. The balance 20% is payable as a lump sum.

Category : Normal exit (Exit after completion of 3 Years)

Non-Government Sector

a. Lump sum withdrawal allowed if the corpus is equal to or below 5 lakhs.

b. If the corpus is more than 5 lakhs, at least 40% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber. The balance 60% is payable as lump sum to the Subscriber.

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