What Are the Key NPS Withdrawal Rules

NPS withdrawal rules in 2022 vary depending on whether you are investing in the All Citizens Model, Corporate Model or Government NPS. Here are the withdrawal rules for different NPS models in brief:

NPS Tier 1 account balance can be withdrawn in full only after the age of 60 at superannuation. However, partial withdrawals are allowed. Here are the NPS withdrawal rules for them:

• The subscriber is permitted to make withdrawals from the NPS account up to three times during their overall NPS investment tenure.
• The subscriber is required to keep an interval of five years between two consecutive partial withdrawals from NPS account. This rule can be waived off in case of medical emergencies.
• The subscriber is permitted to withdraw only up to 25% of their self-contribution into NPS Tier 1 account.
• The subscriber should stay invested in the scheme for at least three years to be eligible for partial withdrawal of NPS account balance.
• Partial withdrawal is permitted only for select circumstances. These special circumstances include funding higher education of children, house renovation, marriage expenses and/or medical emergencies.

NPS withdrawal rules are different for Tier 1 and Tier 2 accounts in case a subscriber wants to exit prematurely. Below are the rules of withdrawal for the different accounts:

A subscriber cannot withdraw from the NPS scheme before retirement. However, partial withdrawals under NPS are permitted under specific criteria. Here are the potential reasons for which NPS partial withdrawals are allowed in 2023:

• Funding own or children’s marriage (including legally adopted child)
• To funds dependent children’s higher education
• Construction, purchase or renovation of self-owned house
• To pay for skill development or self-development courses
• To pay for treatment in case of specific critical illnesses such as:

• Cancer
• Kidney failure
• Primary Pulmonary Arterial Hypertension
• Multiple Sclerosis
• Major Organ Transplant
• Coronary Artery Bypass Graft
• Aorta Graft Surgery
• Heart Valve Surgery
• Stroke
• Myocardial Infarction
• Coma
• Total blindness
• Paralysis
• Life-threatening accident
• Any other life-threatening critical illness

Here are the NPS withdrawal rules at maturity: