National Pension System (NPS) is a market linked, defined contribution product administered by the Pension Fund Regulatory and Development Authority (PFRDA) to offer affordable social security to citizens. It is low-cost, tax-efficient plan to which both employees and employers contribute.
NPS platform offers different models to suit the different segments of users which include:
– The Government model for the Central and State Government Employees – Mandatorily applicable on Central Government employees (except Armed Forces) recruited on or after 01.01.2004. Subsequently, all State Governments excluding West Bengal have also adopted NPS for their employees.
Read More: SCSS vs PMVVY: Which retirement savings scheme offers better returns and which one is right for you?
– The Corporate Model – Companies can adopt NPS for their employees with contribution rates as per the employment conditions.
– The All Citizens Model – It allows all citizens of India aged between 18 – 65 years to join NPS on voluntary basis.
Withdrawal under NPS
The normal exit from NPS can be made at the age of 60. However, early exit is also permitted with certain conditions.
Partial withdrawal under NPS
Under the scheme, subscribers are allowed to make partial withdrawal of up to 25 per cent of their own contributions at any time before exit from NPS Tier-I for a maximum of three times during the entire tenure of subscription under NPS for certain purposes specified in the regulations.
The partial withdrawals are allowed from NPS Tier-1 after contributing for at least ten years. There is, however, no minimum time gap now stipulated between two partial withdrawals.
Read More: EPF, PPF, and VPF: What’s The Difference
Conditions for partial withdrawal
– for higher education and marriage of children including a legally adopted child
– for construction of a residential house or flat in own name or in a joint name with legally wedded spouse.
– for treatment of specified illnesses: if the subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents suffer from any specified illness, which shall comprise of hospitalisation and treatment.
– Towards meeting the expenses by subscriber for skill development/re-skilling or for any other self-development activities.
– Towards meeting the expenses by subscriber for establishment of own venture or any start-ups.
– To meet medical & incidental expenses arranging out of disability or incapacitation suffered.
How to apply for partial withdrawal
Partial withdrawal request can be initiated online by Subscriber. Alternatively, Subscriber can submit physical partial withdrawal form (601-PW) along with documents to POP, based on which POP can initiate online request. However, POP is required to ‘Authorise’ the Withdrawal request in CRA system.
In the CRA system (www.cra-nsdl.com), subscriber can login with PRAN as user ID, password and select the “Tier I Partial Withdrawal”.
The subscriber will also have to accept the self-declaration for NPS partial withdrawal.
