Primary objective of Tier – I NPS Account is to create a Corpus which can be used at the time of retirement to buy annuity for the Subscriber. Hence, a subscriber can withdraw a maximum 60% as lump sum. The remaining 40% of the corpus will have to be annuitized. You may choose to purchase an annuity for an amount greater than 40% of the corpus. (One can also annuitize 100% of the corpus)
However, if the Corpus at the time of exit from NPS at the age of 60 years is less than 2 lakhs, Subscriber has the option to withdraw the entire amount in lump sum.
As per new regulations wef on May 11, 2015, NPS subscribers will now be allowed to prematurely withdraw^ funds from their Tier I account only if they have been enrolled with NPS for a minimum period of 10 years. This shall be subject to the terms and conditions, purpose, frequency and limits specified in the Regulations. Further details and applications forms for this procedure are awaited.
^Withdrawal before attaining the age of superannuation / 60 years.
In case of exit from NPS on attainment of the age 60, subscriber can defer the withdrawal option till 10 years. That means, if at the time of exit from NPS (on attaining the age 60), can let the amount remain in NPS account and he can opt for withdrawal at any point of time before he attains the age 70 years.
However, in case of pre – mature exit from NPS (before attaining the age of 60 years), Subscriber does not have option to defer the option.
The fund would continue to remain invested. The Pension Fund Manager, Scheme Preference and Asset Allocation Pattern will remain the same as these were at the time of vesting.
In such cases, the NPS Accounts would be closed. Subscriber will not be allowed to make any further contribution in either of the accounts.
Following documents are required to be submitted along with the withdrawal forms in order to settle the claims:
NPS subscribers will be allowed to prematurely withdraw funds from their Tier I account only if they have been enrolled with NPS for a minimum period of 10 years. This shall be subject to the terms and conditions, purpose, frequency and limits specified in the Regulations.
Following are the documents required to be submitted along with the NPS withdrawal forms for premature withdrawal –