The Pension Fund Regulatory and Development Authority (PFRDA) has given a big relief regarding the beginning of withdrawal and investment from the Pension Fund ie NPS. PFRDA has allowed subscribers to withdraw the entire amount without purchasing any pension plan (Annuity) in case the NPS amount is less than Rs 5 lakh. Apart from this, the regulator has also increased the premature withdrawal limit and made several other changes including the maximum age limit to start investing in NPS.
What is the current rule
At present, members of the National Pension Scheme (NPS) have to purchase a Pension Scheme (Annuity) offered by insurance companies at the time of retirement or having a pension corpus of Rs. They get pension on the basis. Whereas the withdrawal of the remaining 60 percent amount is exempt. Financial advisors say that this will give a big relief to the depositors.
Premature withdrawal limit increased by two and a half times
In view of the financial challenges in the Corona crisis, the pension regulator has given another big relief. Under this, the premature withdrawal limit from NPS has been increased by two and a half times. The PFRDA notification said that the premature withdrawal limit under NPS has been increased from Rs 1 lakh to Rs 2.5 lakh. Experts say that in view of the financial difficulties in the Corona crisis, the increase in the premature withdrawal limit is a big relief decision.
Option to start investing at an older age
PFRDA has given another big relief. Under this, the maximum age limit for starting investment has also been increased by five years. The regulator has also raised the maximum age to enter NPS from 65 years to 70 years while the exit age limit has been raised to 75 years. Earlier the age to exit NPS was 70 years.