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  • National Pension Scheme Withdrawal Rules

    Retirement is a phase of life which most of us are unprepared for, a phase which changes the basic structure of our life cycle, pushing us towards a fresh, new start. Planning for retirement is essential in most cases, helping us mentally prepare ourselves for the future.The Government of India introduced the NPS to provide a secure future to citizens post their retirement. It is often observed that enrolling for a scheme is often simpler and easier compared to exiting a scheme. This, however, is not the case with the National Pension Scheme as it has multiple withdrawal options. Following simple basic rules ensure that withdrawing amount from your National Pension Scheme account is as easy as the post retirement life you plan to lead.

    Rules pertaining to National Pension Scheme withdrawals

    National Pension Scheme withdrawl Rules vary, with different rules framed for different categories.

    Rules for government sector subscribers on retirement

    • An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw the balance in lumpsum. You can Use NPS calculator to get an estimate of your scheme amount.
    • The lump sum withdrawal can be postponed till a subscriber attains the age of 70 years
    • In the event of the accumulated pension being less than Rs 2,00,00/-, an individual can choose to withdraw the complete amount

    Rules for government sector subscribers who take voluntary retirement

    • A minimum of 80% of the amount should be invested in annuity
    • In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to withdraw the complete amount

    Rules pertaining to death of government sector subscriber

    • In the event of a subscriber passing away before reaching retirement age, 80% of the amount in the account should be used to purchase annuity. The onus of this lies on the nominee/legal heir
    • In the event of the accumulated pension being less than Rs 2 lakh, a nominee can choose to withdraw the complete amount

    Rules for Corporate sector employees and citizens on retirement

    • An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw the balance in lumpsum
    • The lump sum withdrawal can be postponed till a subscriber attains the age of 70 years
    • In the event of the accumulated pension being less than Rs 2 lakh, an individual can choose to withdraw the complete amount

    Rules for Corporate sector employees and citizens who opt for voluntary exit

    • An individual should have maintained an account for at least 10 years
    • 80% of the amount should be used to purchase annuity
    • In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to withdraw the complete amount

    Rules pertaining to death of corporate sector subscriber

    • In the event of death of a subscriber, the nominee can choose to withdraw the accumulated amount as a lump sum

    Partial withdrawal rules

    • A subscriber can withdraw only 3 times during the tenure of his/her subscription
    • A subscriber should maintain a minimum gap of 5 years between ant 2 withdrawals. This gap can be reduced only during medical emergencies
    • A subscriber can withdraw only 25% of his contributions towards this scheme
    • A subscriber should have been a member of this scheme for at least 10 years in order to be eligible for partial withdrawal
    • Partial withdrawal is allowed only in certain exceptional cases, like education of his/her children, marriage expenses, house construction or medical emergencies

    These NPS withdrawl rules have been designed to simplify the working of this scheme, helping a subscriber plan for his/her retirement.

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