New Rules For NPS Withdrawals Coming Into Effect From February 1: Check What Changes It Brings

New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) has introduced fresh guidelines for withdrawing pensions through the National Pension System (NPS), set to be effective from February 1, 2024. These regulations outline conditions for subscribers looking to make partial withdrawals from their pension accounts.

Withdrawal Limitations

According to the updated rules, subscribers can withdraw a maximum of 25 percent of their contributions from their pension accounts, excluding the employer's share. However, this partial withdrawal is subject to specific conditions and purposes. (Also Read: APY: Monthly Contribution Of Rs 210 Can Fetch Rs 5,000 In Pension Per Month In 42 Years)

Permissible Partial Withdrawals

The revised regulations allow partial withdrawals for various reasons, including higher education expenses for the subscriber's children, marriage expenses, residential property purchase or construction, medical expenses related to specified illnesses, disability-related expenses, skill development, re-skilling, and establishment of a venture or start-up. (Also Read: From Humble Beginnings To Fleet Of 400 Cars: The Inspiring Journey Of Ramesh Babu, The 'Billionaire Barber')

Prerequisites For Withdrawals

Subscribers must be members of the NPS for a minimum of three years from their joining date to be eligible for partial withdrawals. The withdrawal amount is capped at one-fourth of the subscriber's total contributions, with a maximum of three partial withdrawals during their entire subscription period.

Processing Withdrawal Requests

To initiate a withdrawal, subscribers need to submit a request with a self-declaration stating the purpose for withdrawal to the central recordkeeping agency (CRA) through their respective government nodal office or point of presence.