Partial NPS Withdrawal Rules – Procedural Guidelines
The National Pension System (NPS) has specific rules and orders regarding withdrawal, including partial withdrawal. The guidelines for procedural steps to take for such partial withdrawals are outlined by the Pension Fund Regulatory and Development Authority (PFRDA), which oversees the NPS. It’s important to understand these guidelines thoroughly before making any withdrawals to avoid any complications or penalties.
GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS (RAIL MANTRALAY)
(RAILWAY BOARD)
No.2016/F(E)III/1(1)/3
New Delhi, Dated: 24.04.2020.
The GMs/Principal Financial Advisers,
All Zonal Railways/Production Units etc.,
(As per mailing list)
Subject: Partial Withdrawals from National Pension System (NPS) for different purpose and procedural guidelines.
A copy each of the Pension Fund Regulatory and Development Authority (PFRDA)’s circular No.PFRD/2020/7/REG-EXIT/1 dated 09.04.2020 and No PFRDA/2018/47/Reg-Exit/4 dated 24.05.2018 on partial withdrawals under National Pension System for different purposes, and No.PFRDA/2018/40/Exit. dated 10.01.2018 & No PFRDA:2016/7/Exit/2 dated 21.03.2016 providing procedural guidelines for partial withdrawals, are enclosed for information and compliance. The instructions contained in these circulars shall apply mutatis mutandis on Railways also.
2. The instructions on Pension Fund Regulatory and Development Authority (Exits and withdrawals under the National Pension System) Regulations, 2015 and amendments thereto mentioned in the above circulars have been adopted on Railways vide letter of even number dated 27 05.2016 & 23.04.2020
sd/-
(G. Priya Sudarsani)
Director, Finance (Estt.)
Railway Board
Click to view the Railway Order
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No, partial withdrawals cannot be mixed with lump sum withdrawals from NPS. Lump sum withdrawals are allowed only at the time of retirement or superannuation.
As per the current income tax laws in India, partial withdrawals from NPS are exempt from income tax.
After a partial withdrawal, the remaining funds in the NPS account continue to stay invested and accumulate until the subscriber reaches retirement age or chooses to opt out of the NPS.
To make a partial withdrawal from NPS, subscribers need to submit a duly filled withdrawal form along with the required supporting documents to their respective NPS service provider.
NPS subscribers are allowed to make only 3 partial withdrawals during the entire tenure of their NPS account.
NPS subscribers can withdraw up to a maximum of 25% of their own contributions towards NPS, excluding contributions made by the employer, after completing the minimum contribution period.
To be eligible for partial withdrawal from NPS, individuals must have completed a minimum of 3 years of contribution and have specific purposes like higher education, marriage, purchase/construction of a house, or treatment of specified illnesses.
The procedural guidelines for partial withdrawal from NPS include meeting certain conditions, such as completing a minimum period of contribution and having a specific purpose for withdrawal.
Partial withdrawal refers to the option for NPS subscribers to withdraw a portion of the accumulated funds in their NPS account for certain specified needs.
NPS stands for National Pension System, a government-sponsored pension scheme in India.
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