NPS partial withdrawal rule changing for these subscribers from Jan 1
When the coronavirus pandemic hit the world in 2020, authorities across countries reacted with urgency to ensure people have adequate amount of cash with them for sudden hospitalisation and other Covid-related expenses. One of the measures adopted in India was allowing National Pension System (NPS) subscribers to partially withdraw money online through self-declaration. This had come as an immense relief to the NPS subscribers.
NPS subscribers were no longer required to submit supporting documents to substantiate the reasons for partial withdrawal. However, as the pandemic subsided, the Pension Fund Regulatory and Development Authority (PFRDA) has decided to do away with this.
The pension regulator has said the online partial withdrawal facility from NPS through self-declaration will stop for government sector subscribers, starting January 1, 2023, The Economic Times reported.
“With the abating of the pandemic-related difficulties & relaxation of lockdown restrictions, the issue examined after taking into consideration of the prevalent practices, circumstances and law, it has been decided to make it mandatory for all the government sector subscribers (central/state govt and central/state autonomous bodies) to submit their requests through their associated nodal offices,” PFRDA said in a circular dated December 23.
The pension regulator launched the online partial withdrawal facility in January 2021. It had said that this decision was taken to help subscribers “cope with the Covid pandemic” and ease the burden of nodal officers from verification and authorisation during the lockdown.
Non-government sector NPS subscribers
PFRDA has clarified that the partial withdrawal facility through self-declaration will continue for voluntary non-government NPS subscribers.
What’s the process?
There are some conditions that need to be fulfilled for NPS subscribers to be able to withdraw money partially. According to Protean, eGov Technologies Ltd website, a central recordkeeping agency, the following conditions need to be fulfilled at present:
- You should be an NPS subscriber for at least three years
- The amount you wish to withdraw should not exceed 25 per cent of the contributions made
- Only three partial withdrawals are allowed during the tenure of the NPS subscription
- You will have to cite a specific reason for partial withdrawal. These include: higher education of children; marriage of children; purchasing/constructing a residential house; treatment of critical illnesses among others
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