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NPS Withdrawal Process Insights


Retirement planning is an integral part of planning one’s finances. With increasing privatization, it is only wise to set aside a portion of your earnings for use in retirement. NPS (National Pension System) One of the most popular tools for planning your retirement income. If you haven’t had a chance to know what NPS is, click here to read our blog.

In this article, we will cover the process of withdrawal from NPS. Withdrawals can be made in any of the following 4 scenarios – Exit on Retirement, Premature Exit, Partial Withdrawal, Withdrawal due to death of the account holder. Withdrawal request can be initiated online through NPS account login. Such request needs to be verified and authorized by the respective POP. In case a subscriber is unable to initiate an online withdrawal request, they will have to submit the physical withdrawal form along with the required documents to the POP. On completion of the withdrawal process, the amount will be credited to the account holder’s bank account.

On retirement:

On reaching the retirement age, the subscriber can exit NPS. A Claim ID is generated 6 months before the account holder reaches the age of 60 years. The account holder will receive the due notification through email, SMS or letters. This claim ID is required while making withdrawals.

duly filled with FormThe account holder has to submit the following documents

  • original pran card
  • Advance stamped receipt (duly filled and cross-signed by the subscriber on revenue stamp)
  • KYC documents
  • A canceled check (containing the subscriber’s name, bank account number and IFSC) / bank certificate on bank letterhead containing the subscriber’s name, bank account number and IFSC is required to be submitted as proof of bank. A copy of the bank passbook can be accepted if it bears the photograph, name and IFSC of the subscriber and is self-attested by the subscriber.
  • Request cum Undertaking Form

pay attention:

  • Full withdrawal is possible only if the amount at the time of retirement is less than Rs 2 lakh
  • Apart from the annuity, the account holder can also withdraw up to 10 times the lump sum amount from the retirement age till the age of 70 years. This is called a phased withdrawal. However, this is possible only when the account holder buys the annuity.

Withdrawals on premature exit:

A subscriber can make premature withdrawals from NPS only after 10 years of account opening. However, at least 80% of the corpus has to be opted for annuity and the rest can be withdrawn in lump sum.

The documents to be submitted are the same as those to be submitted for exiting superannuation. Click Here for form. The subscriber has to approach the POP for the claim ID. Full withdrawal is possible only if the corpus at the time of withdrawal is less than Rs 1 lakh.

Partial Withdrawals:

a NPS The subscriber can withdraw a part of his corpus and still continue to contribute to the NPS. This is called a partial withdrawal. Partial withdrawal can be done only after 3 years of account opening. Partial withdrawals cannot exceed 25% of the total amount, and cannot be made more than three times during the entire period of account holding. Partial withdrawal is allowed only for the following 4 reasons.

  1. children’s higher education
  2. children’s wedding
  3. Purchase/construction of residential house (Subject to specified conditions)
  4. treatment of serious diseases

Partial withdrawal requests can be made online or physically at any of the POPs. The form to be submitted is attached Here.

Withdrawal due to death of subscriber:

In case of unfortunate death of the subscriber, the corpus will be paid to the nominee or legal heir of the subscriber as specified by the subscriber. To receive the amount, the claimant/nominee has to submit along with the following documents Form.

  • original pran card
  • Enhanced Stamped Receipt (duly filled and cross-signed on Revenue Stamp by the claimant)
  • KYC documents
  • A canceled check (name of claimant, bank account number and IFSC) or bank certificate on bank letterhead containing claimant’s name, bank account number and IFSC is required to be submitted as bank proof. Copy of bank passbook can be accepted, however, it should bear the photo, name and bank IFSC of the claimant and should be self-attested by the claimant.
  • Original Death Certificate (If the death certificate is in the local language, you need to submit this form Too)

On receipt of the required documents, they will be processed and the amount will be credited to the accounts of the nominees/claimants.

Hope this article has helped you with your query on NPS withdrawal. If you have any doubts about NPS, please feel free to contact our support team on 044 – 61104100. contact@fundsindia.com. Happy Retirement Planning!

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