When an NPS subscriber reaches the age of superannuation, i.e., he/she attains the age of 60, he/she can withdraw 60 percent of the accumulated corpus as a lump sum tax-free
When an NPS subscriber reaches the age of superannuation, i.e., he/she attains the age of 60, he/she can withdraw 60 percent of the accumulated corpus as a lump sum tax-free.
A subscriber can exit from the National Pension System (NPS) in the following ways as per the Pension Fund Regulatory and Development Authority of India (PFRDA).
Death of the subscriber: Nominee/legal heir of the subscriber will get the complete accumulated pension corpus in the case of an NPS subscriber’s demise.
At the time of superannuation: Subscriber can withdraw 60 percent of the accumulated corpus as a lump sum tax-free when an NPS subscriber reaches the age of superannuation, i.e., he/she attains the age of 60.The remaining 40 percent of the accumulated pension corpus has to be used to purchase an annuity that can provide regular pension income. The annuity is taxable. If the total accumulated pension corpus is less than or equal to Rs 2 lakh then, a subscriber can withdraw the 100 perent lump sum amount.
How to exit
To complete the withdrawal request process, an NPS subscriber has to physically approach the points of presence (PoPs) in the offline mode. ubmit the relevant KYC documents to the PoP, which will usually be your bank.
The subscriber has to log in to the Central Record Keeping Agency (CRA) system, such as enps.nsdl.com for NSDL CRA in the case of online mode.
One has to then enter relevant details such as corpus allocation for a lump sum and annuity, annuity service provider and annuity scheme and upload the withdrawal documents, including KYC.
Making a premature exit
A subscriber needs to utilise at least 80 percent of the accumulated pension corpus to purchase an annuity that can provide a regular monthly pension income if an NPS subscriber wants to make a premature exit, i.e., before the age of 60. The remaining 20% of the funds can be withdrawn as a lump sum. Subscriber can only exit from the NPS after the completion of 10 years in such a case. If the total accumulated pension corpus is less than or equal to Rs 1 lakh a subscriber can withdraw the 100 percent lump sum amount.
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