How to Withdraw Funds from NPS Online

The National Pension System (NPS) is designed to provide long-term financial security, but subscribers may need to withdraw funds at different stages of life. Withdrawals from NPS are subject to specific rules depending on whether the subscriber is withdrawing at retirement, exiting prematurely, or withdrawing partially for specific needs. This guide explains the step-by-step process for withdrawing funds from NPS.

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Types of NPS Withdrawals

1. Withdrawal at Superannuation (Retirement at 60 Years): Withdraw up to 60% of corpus tax-free; the remaining 40% is used to purchase an annuity.
2. Premature Exit (Before 60 Years of Age): Allowed only if the subscriber has completed at least 10 years in NPS. Here, 80% of the corpus must be used to buy an annuity, while only 20% can be withdrawn as a lump sum.
3. Partial Withdrawal (For Specific Needs): Allowed only after three years of contribution, up to 25% of the subscriber’s own contribution.
4. Withdrawal in Case of Death: The nominee or legal heir can withdraw 100% of the corpus.

How to Withdraw from NPS Online

Step-by-Step Process

1. Log in to the NPS Portal
   • Visit the official NPS CRA website: NSDL CRA Portal or Protean eGov Portal.
   • Use PRAN (Permanent Retirement Account Number) and password to log in.
2. Go to ‘Exit from NPS’ Section
   • Click on ‘Withdrawal Request’.
   • Select the type of withdrawal – superannuation, premature exit, or partial withdrawal.
3. Provide Withdrawal Details
   • Select the withdrawal percentage (as per eligibility).
   • Choose your annuity service provider (if applicable).
4. Upload Required Documents
   • Identity proof (Aadhaar/PAN card).
   • Address proof.
   • Bank account proof (Cancelled cheque or passbook copy).
   • Withdrawal form (Annexure 302 for retirement, Annexure 301 for premature exit, Annexure 303 in case of death).
5. Authenticate the Request
   • Verify the withdrawal request using the OTP sent to your registered mobile number.
6. Processing & Fund Transfer
   • The request is reviewed and processed within 15-20 working days.
   • The lump sum amount is credited to the registered bank account.
   • The annuity portion is transferred to the annuity service provider.

How to Withdraw from NPS Offline

Step-by-Step Process

1. Download the Withdrawal Form
   • Available from the NPS website or your Point of Presence (PoP).
2. Fill in the Required Details
   • PRAN, withdrawal type, annuity provider details (if applicable).
3. Attach Supporting Documents
   • Aadhaar/PAN card, bank proof, and address proof.
4. Submit the Form
   • Submit the form at the nearest PoP or Nodal Office.
5. Processing & Fund Transfer
   • Funds will be transferred upon verification within 30 working days.

Partial Withdrawals from NPS

• Allowed only after three years of investment.
• Maximum 25% of the subscriber’s own contributions can be withdrawn.
• Withdrawals are permitted for higher education, marriage, house purchase, or medical emergencies.
• No tax is applicable on partial withdrawals.

Tax Implications on NPS Withdrawals

• Withdrawal at 60 (Superannuation): 60% tax-free, 40% used for annuity purchase (taxed as per slab).
• Premature Exit: 80% goes to annuity, 20% is taxable.
• Partial Withdrawal: Fully tax-free.
• In Case of Death: Entire corpus is tax-free for nominees.

Key Considerations Before Withdrawing from NPS

• Annuity Purchase is Mandatory for most withdrawals above ₹5 lakh.
• Premature withdrawals have restrictions, and only limited reasons are allowed.
• Processing time is 15-30 days, so plan withdrawals in advance.
• Choose the Right Annuity Provider to maximise pension benefits.

Common Issues & Troubleshooting

• Forgot PRAN Details? Contact the NPS customer support for recovery options.
• Mismatch in Documents? Ensure Aadhaar, PAN, and bank details are accurate.
• Processing Delays? Follow up with your POP or CRA for status updates.

Final Thoughts

NPS withdrawals require careful planning to maximise tax benefits and ensure financial security post-retirement. Whether opting for superannuation, premature exit, or partial withdrawal, understanding the rules and processes is essential. By following the step-by-step guide, subscribers can efficiently withdraw funds from their NPS account while ensuring compliance with regulatory requirements.