The National Pension System (NPS), the government-backed retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA), allows subscribers to withdraw funds partially for certain purposes, such as medial treatment, purchase or construction of house, etc., before retirement.
Recently, PFRDA has updated key rules for withdrawals—partial withdrawal before retirement and lump sum withdrawal post retirement. Subscribers can make up to four partial withdrawals (with a minimum gap of four years) before age 60, and unlimited withdrawals, at three-year intervals after the age of 60. Upon retirement, they can withdraw up to 80 per cent of the corpus as a lump sum, and need to use the remaining 20 per cent to buy annuity.
How To Withdraw Funds From NPS
5 February 2026
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Steps to withdraw via Protean CRA:
Login In To CRA Portal: Visit Protean eGov website, log in with Permanent Retirement Account Number (PRAN) and password.
Withdrawal Section: Visit the Transact Online section and select a Withdrawal option.
Choose Withdrawal Type: Choose the appropriate option—retirement, partial withdrawal, or premature exit.
Fill Details And Submit Form: Confirm your PRAN, upload necessary documents, complete the form, and submit online.
Offline
Collect The Form: Download withdrawal/ exit form from the CRA website or get it from a point of presence (PoP)
Fill Out The Form: Enter your PRAN details and personal information, and attach all required KYC documents.
Submit The Form: After completion, submit the form at a nearest PoP. Money will be credited in 2 working days.
Key Points To Keep In Mind
1. Maximum Age
The maximum age to remain invested in NPS has been extended from 75 to 85 years.
2. Tax Treatment
Up to 60 per cent of the NPS corpus withdrawn at retirement is tax-free. The remaining lump sum portion (20 per cent) is taxable according to the income tax rules. The annuity income from the 20 per cent corpus invested in annuity products is also taxable.
3. Lock-In Period
The mandatory lock-in period of five years for Tier 1 accounts has been removed.
4. Full Lump Sum Option
If the total corpus is up to Rs 8 lakh at age 60 or after 15 years of subscription, one can withdraw the full amount in lump sum, or in 80:20 ratio (lump sum and annuity).
5. In Case Of Death
If the subscriber dies, the entire corpus is transferred to the nominee. The rules depend on whether the subscriber was working in the government or a non-government sector.
