Contribution to National Pension System (NPS) is usually done for the long-term wealth creation. Nevertheless, there could be certain exigencies which call for the need to withdraw a part of the corpus.
The Pension Fund Regulatory and Development Authority (PFRDA) rules stipulate that a subscriber can make partial withdrawal but only up to 25 percent of their contributions to their individual pension account excluding the employer’s contribution.
The pension fund body released a master circular early this month delineating the reasons for partial withdrawals.
These include the following:
A. Higher education of the subscriber’s children, including a legally adopted child.
B. Mariage of the subscriber’s children, including a legally adopted child.
C. Purchase or construction of a residential house or flat in the subscriber’s own name or in joint name with their legally wedded spouse. However, in case s/he already owns a house, then no withdrawal is permitted.
D. For the treatment of specified illness including hospitalisation and treatment expenses for critical diseases.
ALSO READ: Pension funds spike as one-year equity returns jump to 29 per cent
E. Medical expenses arising from the disability.
F Expenses incurred by the subscriber for skill development.
G. Expenses incurred by the subscriber for the establishment of own venture or start-ups.
Subscriber’s eligibility
To be eligible, the subscriber should have been a member of the NPS for a minimum of three years from the date of joining. The partial withdrawal should not exceed 25 percent of the subscriber’s total contributions in their individual pension account.
Only three partial withdrawals are allowed during the entire subscription tenure under the NPS.
Process of withdrawal
The subscriber should submit the withdrawal request along with a self-declaration declaring the purpose for the withdrawal to the central recordkeeping agency (CRA) through their nodal office or point of presence, as the case may be.
Upon receiving the withdrawal request — the Point of Presence or Government Nodal Office — will take the necessary steps to identify the beneficiary. Partial withdrawal requests will be processed by CRA.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
Published: 21 Feb 2024, 10:34 AM IST