Retirement planning is an integral part of planning one’s finances. With growing privatization, it is only wise that you set aside a part of your earnings for use in retirement. NPS (National Pension System) is one of the most popular tools to plan your retirement income. If you haven’t had a chance to familiarize yourself with what NPS is, click here to read our blog.
In this article, we’ll be covering the process to withdraw from NPS. Withdrawal can be made in any of the following 4 scenarios – Exit Upon Superannuation, Premature Exit, Partial Withdrawal, Withdrawal due to death of account holder. The withdrawal request can be initiated online through the NPS account log-in. Such a request needs to be verified and authorized by the associated POP. If a Subscriber is unable to initiate an online Withdrawal request, they need to submit the physical Withdrawal form along with the required documents to the POP. Upon completing the withdrawal process, the amount will be credited in the account holder’s bank account.
Upon reaching the age of retirement, the subscriber can exit NPS. A Claim ID is generated 6 months prior to the account holder reaching 60 years of age. The account holder will receive the due notification via emails, SMS, or letters. This Claim ID is necessary while making the withdrawal.
Along with the duly filled form, the account holder will have to produce the following documents
- Original PRAN card
- Advance stamped receipt (duly filled and cross-signed on the Revenue stamp by the Subscriber)
- KYC documents
- Cancelled Cheque (having Subscriber’s Name, Bank Account Number and IFSC) / Bank Certificate on Bank Letterhead having Subscriber’s name, Bank Account Number and IFSC required to be submitted as bank proof. Copy of Bank Passbook can be accepted, if it has Subscriber’s photograph, Name and IFSC on it & is self-attested by the Subscriber.
- Request Cum Undertaking form
- Complete withdrawal is possible only if the corpus is less than Rs 2 lakhs at the time of superannuation
- Apart from the annuity, the account holder may also withdraw lump sum upto 10 times from the age of retirement to 70 years of age. This is called Phased Withdrawal. However, this is possible only when the account holder buys annuity.
Withdrawal at Premature Exit:
A subscriber can make a premature withdrawal from NPS only after 10 years of account opening. However, at least 80% of the corpus has to be opted for annuity and the rest can be withdrawn lump sum.
The documents to be submitted are the same that are to be submitted for exit at superannuation. Click here for the form. For the claim ID, the subscriber has to contact the POP. Complete withdrawal is possible only if the corpus is less than Rs 1 lakh at the time of exit.
A NPS subscriber can withdraw a part of their corpus and still continue contributing to NPS. This is called Partial Withdrawal. Partial Withdrawal can be made only after 3 years of account opening. Partial withdrawal cannot exceed 25% of the corpus, and cannot be done more than thrice during the entire period of account holding. Partial withdrawal is allowed only for the following 4 reasons.
- Children’s higher education
- Children’s marriage
- Purchase/construction of residential house (in specified conditions)
- Treatment of critical illnesses
The request for Partial Withdrawal can be placed online or physically at any of the POPs. The form to be submitted is linked here.
Withdrawal due to Death of Subscriber:
In the unfortunate event of the death of the subscriber, the corpus will be paid to the nominee assigned by the subscriber, or to the legal heir of the subscriber. To receive the corpus, the claimant / nominee must produce the following documents along with the form.
- Original PRAN card
- Advanced stamped receipt (duly filled and cross-signed on the Revenue stamp by the Claimant)
- KYC documents
- Cancelled Cheque (having claimant’s Name, Bank Account Number and IFSC) or Bank Certificate on Bank Letterhead having claimant’s name, Bank Account Number and IFSC required to be submitted as bank proof. Copy of Bank Passbook can be accepted, however, it should have the claimant’s photograph, Name and Bank IFSC on it and should be self-attested by the claimant
- Original Death Certificate (If the death certificate is in the vernacular language, you will have to submit this form too)
Upon receiving the necessary documents, they will be processed and the amount will be credited to the accounts of the nominees/claimants.
Hope this article helped you with your query on NPS withdrawals. Should you have any doubts about NPS, please feel free to contact our support team at 044 – 61104100 or at email@example.com. Happy Retirement Planning!