Outlook Money
NPS is a contributory retirement scheme that provides social security to citizens in the form of pension income. It offers flexibility in deposit and withdrawal options.
It has a 60:40 withdrawal rule allowing a maximum of 60 per cent of the corpus to be withdrawn tax-free at maturity with the balance of 40 per cent as annuity income.
Here are Types of allowed NPS Withdrawal by PFRDA
Complete Withdrawal At Maturity Or After: A subscriber can withdraw the entire corpus at superannuation or after turning 60. Note that full withdrawal means 60 per cent withdrawal as a lump sum and 40 per cent as an annuity.
In certain cases, subscribers can make a premature withdrawal of the full amount, such as in case of permanent disability severe illness, or death. In this case, an annuity is not necessary and the full amount can be withdrawn.
NPS allows premature exit if a subscriber chooses not to continue for some reason and wants to withdraw money. However, the withdrawal is limited to 20 per cent in lump-sum and 80 per cent through an annuity.
Withdrawals can only be made after three years of enrolment in the scheme for a maximum of 25 per cent of the subscriber's contribution. It is permitted for a maximum of three times during the entire subscription period. Notably, partial withdrawal is allowed only for specific reasons.
The account holder can visit the official portal of CRA, log in via PRAN credentials and go for the transact online option under withdrawal and choose the type of withdrawal.
The account holder may also download the concerned withdrawal form online via CRA official port, fill in the details and submit it along with the necessary documents to a nearby POP service provider or nodal office.