The Pension Fund Regulatory and Development Authority (PFRDA) has issued new guidelines for partial withdrawals under the National Pension System (NPS). It will come into effect on February 1st.

A notification issued by the PFRDA on January 12 said that NPS subscribers can now withdraw part of their money for purposes such as higher education, marriage, purchase of residence and medical expenses. Partial withdrawals shall not exceed 25% of the total contributions to the insured’s pension account.

The notice also mentioned that the income generated from the investment shall not be partially withdrawn. Subscribers can withdraw up to 3 times during their tenure. Subscribers must have maintained their NPS account for three years to be eligible for partial withdrawal of up to 25%.

NPS investors can also withdraw part of their funds for purchase or construction of a house or apartment. However, withdrawal is not allowed if the subscriber owns a house or apartment that is not an ancestral property. In the event of a medical emergency, such as hospitalization and treatment for cancer, kidney failure, multiple sclerosis, heart-related surgeries, chronic illnesses like Covid-19, and life-threatening accidents, partial withdrawals are allowed to cover such expenses.

Subscribers can also withdraw some funds from their NPS account for skill development or any other self-development activities. If you want to build your own business or startup, you can also withdraw up to 25% of the deposit amount.

Eligibility and Withdrawal Requests

Investors should have been a member of NPS for at least three years to be eligible for partial withdrawal benefits. It should not exceed 25% of the total contributions from subscribers. Three partial withdrawals are allowed per subscriber. For subsequent partial withdrawals, the subscriber will only be allowed to make incremental contributions from the date of the last partial withdrawal.

Subscribers should submit a withdrawal request along with a self-declaration describing the purpose of the withdrawal. These documents need to be submitted to the respective government nodal offices.