PFRDA New Master Circular for NPS partial withdrawal: If you are a subscriber of NPS, then this news is very important for you. You can also withdraw some part of the amount deposited in your NPS account before maturity. But for this you will have to follow the rules given in the new circular. Pension Fund Regulatory and Development Authority (PFRDA) has announced these new rules for partial withdrawal of the amount deposited in NPS (National Pension System) fund. In this new master circular, it has been told that what will be the maximum limit of partial withdrawal from NPS and for what purposes it can be allowed to do so.
Limit for partial withdrawal from NPS fund
According to the new master circular, NPS subscribers can withdraw only a maximum of 25 percent of the total amount deposited in their pension account. Even if contribution is made in the NPS account by the employer, the employee will not be allowed to withdraw any part of it. For partial withdrawal, subscribers will have to submit a withdrawal request form and self-declaration to the central record-keeping agency.
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For what purposes money can be withdrawn
Partial withdrawal can be made from NPS fund only for certain purposes or needs. These are the specific objectives:
For children's higher education
for children's marriage
To buy or construct a residential house or flat. This house or flat should be in the subscriber's own name or legally in joint ownership with his/her spouse.
If the subscriber has any separate residential house or flat of his own other than the ancestral property, he will not be allowed to make partial withdrawal for purchasing or constructing a house.
For the treatment of serious diseases. These diseases include cancer, kidney failure, serious heart diseases, major organ transplant, coma, blindness, paralysis, treatment and hospital expenses of Covid-19 and serious accidents.
Medical and other related expenses arising out of disability or incapacitation of the Subscriber.
Expenditure incurred by the subscriber on his skill development/re-skilling or any other self-development activity.
- Expenses incurred by the subscriber on starting his own business or startup.
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Other conditions related to partial withdrawal
For partial withdrawal from NPS fund, the subscriber will also have to fulfill some more conditions. For instance:
Partial withdrawal will be allowed only to the subscriber who has been a member of the National Pension System i.e. NPS Scheme for at least 3 years.
The amount of partial withdrawal should not exceed 25 percent of the total amount deposited in the scheme by the subscriber till the date of application. Returns received on contributions will not be taken into account to determine this amount.
During the entire period of subscription to the scheme, any member will be allowed to make partial withdrawals maximum three times.
At the time of second withdrawal, the maximum amount will be determined only on the basis of the amount that the subscriber has deposited after the first withdrawal.
Similarly, the maximum amount for the third withdrawal will be determined based on the amount the subscriber has deposited after the second withdrawal.
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The new circular will come into effect from 1 February 2024
The master circular released on the website of PFRDA on January 12, 2024 will come into effect from February 1, 2024. In this circular, all such rules have been kept at one place, which will be necessary to follow to withdraw money from NPS account.