NPS Withdrawl- Big update for NPS investors. National Pension System (NPS) is a scheme which is a great way to save money for retirement. Many times we need some money before retirement or we have to withdraw our deposited money after retirement. So let us tell you how you can withdraw your money from NPS in the year 2025.

NPS i.e. National Pension System is a government-backed scheme in which you deposit some money every month, and after retirement you get a lump sum amount and monthly pension. This scheme is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). There are two types of accounts in it.

Tier-1: This is the main retirement account, which has strict withdrawal rules.

Tier-2: This is an alternative savings account in which withdrawal is easy but no tax benefit is available.

Today we will focus on Tier-1 withdrawal rules, as this is the main account and its rules are more important.

The withdrawal limit per time is only 25% of the amount deposited in that period. For example, if you have deposited a total of Rs 4 lakh in NPS, then the maximum amount you can withdraw at any one time is Rs 1 lakh and this can be done only three times.

Which documents are required?

NPS Withdrawal/Exit Form
Proof of Identity/Address
Proof of bank account
Copy of PRAN card
Now self-declaration will not work in online withdrawal. It is mandatory to upload all the documents.

How to do the online process

  • Login to NPS CRA website (PRAN number and password)
  • Go to ‘Transact Online’ tab, select ‘Withdrawal’
  • Select the type of withdrawal you want to make: Partial, Superannuation, Premature (choose as per your choice)
  • Fill the form, attach required documents (PAN, Aadhaar, bank details, nominee).
  • Submit online. If filling offline then give the form to the nodal office/POP.
  • The money reaches your account within three days.

Premature withdrawal

If you want to completely exit the National Pension System (NPS) before the age of 60, it is called premature withdrawal. The purpose of NPS is to save for retirement, so its rules are a little strict. For this withdrawal, your NPS account must be at least 5 years old. At the time of withdrawal, you can withdraw only 20% of your total corpus in lump sum, while with the remaining 80% amount you will have to buy an annuity plan, which will provide regular pension after retirement.

However, if your total corpus is less than Rs 2.5 lakh, you can withdraw the entire amount in lump sum, without buying an annuity. The process involves logging into the eNPS NSDL portal and selecting the Premature Withdrawal option, filling in your details and reason for withdrawal, and specifying the annuity plan. The system-generated form along with KYC documents and annuity-related papers need to be submitted to the nodal office or POP. Online submission option is also available.

How to withdraw money?

The withdrawal process involves logging into the eNPS NSDL portal, selecting the Retirement or Superannuation option, entering the withdrawal amount and annuity plan details. After this, the system-generated form along with Aadhaar, PAN, cancelled cheque and annuity-related documents are to be submitted to the nodal office or POP. The option of online submission is also available. Once the request is approved, 60% of the amount is transferred to your bank account and 40% is invested in the annuity. This process can be completed in about 10 days. As per tax rules, 60% of lump sum withdrawal is completely tax-free, while pension received from annuity is taxable as per your income tax slab.