If you also invest in the National Pension System (NPS), then this news is very important for you. Recently, the Pension Fund Regulatory and Development Authority (PFRDA) has made some major changes in the rules of partial withdrawal from NPS. After these changes, the entire process of withdrawing money from NPS has changed. Let us know what these new rules are and how much you can withdraw now.
What is the new rule of PFRDA
PFRDA has issued a notification regarding the new rules for partial withdrawal. Now you can make a partial withdrawal only after 3 years of opening an NPS account. Now, no account holder can withdraw more than 25% of their total deposited amount. This new rule has come into effect from February 1, 2024. For example, if you opened an account in January 2020, you can make a partial withdrawal in 2024. If you have contributed ₹ 1 lakh so far, then you will be able to withdraw a maximum of ₹ 25,000 only.
Under what circumstances can you withdraw money
Withdrawal of money from NPS is allowed only under certain circumstances.
You can withdraw money from your NPS account to buy or build your house.
Partial withdrawal can also be made for the higher education of children or their marriage.
You can also withdraw money in case of a medical emergency.
If you are starting a new business or startup, you can also withdraw money from NPS.
Withdrawal can also be made for expenses related to skill development.
Money can also be withdrawn from the NPS account in case of disability or an accident.
Conditions for partial withdrawal
Your NPS account should be at least 3 years old.
You can withdraw only one-fourth (25%) of your contributed amount.
You can make partial withdrawals only 3 times during the entire investment period.
Process to withdraw money from NPS
To withdraw money, you have to file a withdrawal request.
In this request, you have to give the reason for withdrawal and submit the necessary documents related to it.
After the request, the Central Recordkeeping Agency (CRA) verifies your application.
The money will be deposited in your bank account within a few days of the process being completed.
This change makes investing in NPS even more secure and systematic, but at the same time, investors should plan their withdrawal keeping these new rules in mind.