The landscape of National Pension System (NPS) withdrawals is set to undergo significant changes starting from February 1, 2024.

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced revised guidelines for withdrawing funds from NPS, limiting withdrawals to 25 percent of the contributor’s total contributions.

These rules aim to streamline and regulate partial withdrawals for various reasons.

Approved Reasons for Partial Withdrawal

1. Higher Education and Marriage: NPS investors can make partial withdrawals for higher education and marriages, including those of legally adopted children.
2. Residential Property Acquisition: Jointly purchasing or constructing a residential house with a legally married spouse is now an eligible reason for withdrawal, provided it’s the first home (excluding ancestral property).
3. Medical Conditions: Withdrawals are allowed for medical treatments such as Cancer, Kidney issues, High Blood Pressure, Sclerosis, Coronary Bypass Surgery, Stroke, Major Organ Transplants, Graft Surgery, Heart Valve Surgery, Complete Blindness, Paralysis, Coma, and Life-threatening accidents.
4. Disability-related Expenses: Withdrawals can be made for medical and other expenses due to the disability or incapacitation of the contributor.
5. Skill Development and Business Ventures: NPS contributors can withdraw funds for re-skilling, up-skilling, or any other self-development endeavors. Additionally, withdrawals are permitted for expenses related to setting up a business or start-up.

Criteria for Partial Withdrawal

To qualify for partial withdrawal, a subscriber must have been an NPS member for at least three years.

The withdrawal amount cannot exceed 25 percent of the total contributions, excluding employer contributions.

Only the contributed amount is eligible for withdrawal, not the returns received on it.

A maximum of three partial withdrawals are allowed during the subscription period, and regular contributions are required between withdrawals.

How to Make a Partial Withdrawal

1. Visit Point of Presence (POP) or Government Nodal Office: Customers need to visit the POP or government nodal office and fill a self-declaration form, specifying the reason for withdrawal.
2. Central Recordkeeping Agency (CRA) Processing: The withdrawal request will be processed through the CRA after validation of customer details, including bank account information through ‘Instant Bank Account Verification’ using the penny drop process or other technology.
3. Special Consideration for Medical Conditions: In case of medical conditions, a family member can make a withdrawal request on behalf of the customer. The POP will identify the beneficiary, and the CRA will verify customer information, including bank account details.

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