NPS NEW UPDATE: Several major changes have been made for those investing in the National Pension System (NPS) in 2025. The pension fund regulator PFRDA has amended the rules to provide subscribers with greater flexibility, more cash at retirement, and easier financial planning. These new rules will apply to both government and private sector employees.
The biggest change is that you can now continue investing in NPS until the age of 85. Previously, this limit was 75 years. This will allow older investors to invest for a longer period and withdraw funds when needed.
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The rules have been simplified for private sector employees. Now, only 20 percent of the accumulated corpus needs to be invested in an annuity at retirement. Earlier, if the fund exceeded Rs 5 lakh, 40 percent had to be invested in an annuity. Now, subscribers can withdraw up to 80 percent of their accumulated corpus as a lump sum, providing more cash in hand at retirement.
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NPS investors will now also have access to loan facilities. You can take a loan by pledging 25 percent of your accumulated corpus. This facility will help with needs such as medical emergencies or buying a house.
The increase in the maximum investment age to 85 years will give investors the opportunity to stay invested in equity for a longer period and grow their funds. Also, up to 75 percent of the PF balance can be withdrawn one month after leaving a job, while the remaining 25 percent must remain in the account for at least one year. The entire amount can be withdrawn upon retirement, permanent disability, or settling abroad.
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It is now possible to buy health insurance even after the age of 65. Insurance companies cannot refuse to provide policies solely based on age, and it has been made mandatory to introduce special policies for senior citizens.
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After repaying a loan, the bank must return the original property documents within seven working days. A penalty of Rs 5,000 per day will be levied for any delay.
Changes have also been made to tax rules. The standard deduction has been increased to ₹75,000, and due to changes in the tax slabs, income up to ₹12 lakh will be tax-free.
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Now, unclaimed money lying in banks and other institutions can be traced and claimed through a digital portal. This money can be withdrawn with interest, and there is no time limit for claiming it.