NPS Withdrawal Rule Changed: Account holders in the National Pension System (NPS) can withdraw emergency funds even before retirement. Let us know the complete process of NPS claim and all the important rules related to it.
NPS Withdrawal Rule Changed: People invest in different policies while planning for their retirement. At the same time, many types of pension plans are also present in the market, in which people consider National Pension Scheme (NPS) as a very good option. Along with improving your retirement, NPS can prove to be a better option for emergency fund. With this, if the NPS account holder has not made any nominee, then how can money be withdrawn from the account after the death of the account holder? There is a whole process for this too. Let us know all these important things related to the National Pension Scheme (NPS).
What is NPS
In the National Pension System (NPS), the account holder gets the benefit of pension after retirement, in which both the employer and the employee contribute. With this, if the account holder needs an emergency fund before retirement, then you can withdraw 60% of the amount from the deposit on retirement. However, it is necessary to put 40 percent of this amount in pension.
Important rules of NPS
There has been a change in some rules related to the National Pension System (NPS). The age limit for investing in NPS is 18-70 years. Although earlier the age limit for investing in NPS was up to 65 years. Citizens of India aged 65-70 years, OCI can invest in NPS. The age limit for entry into the pension fund is 70 years. At the same time, the rules for withdrawal from NPS have also become easier. According to this, it has become easy to withdraw Rs 5 lakh or less in lump sum. In this, it is mandatory to take annuity from 40 percent of the amount. Up to 50% allocation in equity will be possible after 65 years and withdrawal before 3 years will be considered as premature exit. In pre-mature withdrawal, it is necessary to take annuity from 80% and it is possible to withdraw prematurely-less than Rs 2.5 lakh.
How will be the withdrawal from NPS
There are many withdrawal options available in NPS. In which partial withdrawal can be done after 3 years. At the same time, investment can be stopped after 10 years. At the same time, withdrawal is possible at the age of 60 years.
What are the rules for withdrawal in NPS
- Invest in NPS for at least 3 years
- 25% Withdrawals from the Subscriber’s Total Contribution
- Withdrawals possible a total of 3 times during the subscription period
- Partial withdrawal is possible for some important reasons
What are the things for which partial withdrawal can be done from NPS?
Possible for what?
- For higher education of children
- For marriage of children
- Home buying and renovation
- For the treatment of critical illness
Rules for withdrawal from NPS regarding complete exit
- Subscriber age below 60 years
- In such a situation, 20% withdrawal of the corpus is possible.
- Rest amount will be invested in annuity
- Corpus if less than Rs.1 lakh
- In this case, you can withdraw the entire corpus
- If the account is closed, you will not be able to open it again.
Rules for withdrawal from NPS after retirement
- Possible to withdraw 60% of the corpus on retirement
- 60% withdrawal tax free, rest invested in annuity
- Full lump sum withdrawal possible if corpus is ` 2 lakh or less
Amount to NPS-Nominee
- In case of death before 60, amount to the nominee
- Government employees – it is necessary to take an annuity plan from 80% of the amount
- One-time payment of the remaining amount to the nominee of the government employee
- 100% withdrawal possible if the amount is less than Rs.5 lakh
- Non-government employee-nominee will get 100% amount
How to claim withdrawal from NPS without nominee?
- If the account holder dies before nomination, then the amount will go to the legal heir
succession certificate required for claim amount
- The certificate will be submitted to the state revenue department
- After verification, the deposit will be given to the family
Documents required for NPS death claim
- Death certificate of the account holder
- Aadhaar card of the account holder
- Aadhaar Card of Nominee/Heir
- Succession certificate