Latest NPS Partial Withdrawal Rules Explained In 10 Points

Partial withdrawal of 25 per cent of the contribution made by a subscriber has been exempted from income tax, according to Budget 2017-18.

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Latest NPS Partial Withdrawal Rules Explained In 10 Points

NPS or National Pension Scheme partial withdrawal has been relaxed further.


Pension regulator PFRDA (Pension Fund Regulatory and Development Authority) has eased rules for partial withdrawal from NPS or National Pension Scheme. According to the latest rules, a National Pension Scheme (NPS) subscriber who has completed three years would in the scheme is eligible for partial withdrawal. Partial withdrawals from the NPS kitty were earlier allowed only after 10 years of joining the pension system. National Pension Scheme or NPS is a voluntary savings scheme that helps individuals to accumulate savings for the retirement years.


10 Things To Know About Partial Withdrawal From NPS:



1) PFRDA has specified conditions under which partial withdrawal would be allowed from NPS.

2) Partial withdrawals are allowed for higher education or marriage of children, including legally adopted children.

3) Partial withdrawals from NPS are also allowed for purchase or construction of a residential property or flat in the name of the subscriber or in joint ownership with the subscriber's spouse.

4) If the NPS subscriber already owns a house, individually or jointly, other than an ancestral property, no partial withdrawal for buying a house would not be permitted.

5) Partial withdrawal is also allowed if the subscriber, his/her spouse, children or dependent parents suffer from specified illness.

6) The subscriber will be allowed to withdraw only a maximum of three times during his or her entire tenure of subscription under NPS.

7) The subscriber can only withdraw an accumulation of up to 25 per cent of the contributions made by him or her as on the date of application for withdrawal.

8) The employer contributions, if any, to an NPS account are not considered for these partial withdrawals.

9) The request for withdrawal has to be submitted by the subscriber, along with relevant documents, through the nodal office.

10) If the subscriber is suffering from specified illness, the request for withdrawal may be submitted through any family member of the subscriber.

Partial withdrawal of 25 per cent of the contribution made by a subscriber has been exempted from income tax, according to Budget 2017-18. This change will take effect from April 1, 2018 and will accordingly apply in relation to the assessment year 2018-2019 and subsequent years.
 


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