Investments

What are the NPS withdrawal rules?

You can invest a percentage of the accumulated corpus in an annuity while enjoying the option to withdraw the rest of the amount as a lump sum.

Synopsis:

  • NPS withdrawal rules have been updated by the PFRDA to improve flexibility and accessibility. 

  • Non-government subscribers can now withdraw up to 80% as lump sum, with a reduced annuity requirement of 20%. 

  • Partial withdrawals are allowed for multiple purposes, including education, housing, medical needs and loan repayment against NPS. 

Table of Content

Overview

The National Pension System (NPS) is a retirement savings instrument introduced by the Indian government and regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA). NPS allows you to invest in equity, bonds or government securities. When you turn 60, you have the option to withdraw funds but with certain conditions.  

While enrolling in the NPS is relatively straightforward, understanding the rules for withdrawal is crucial for effectively managing your retirement funds. In December 2025, the PFRDA amended the withdrawal rules under Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pension System) Regulations, 2025.  

This guide provides a detailed overview of the NPS withdrawal rules, ensuring you have all the information needed for effective planning. 

NPS Withdrawal Rules for Non-Government Sector

Here’s what non-government sector (All Citizen Model and Corporate Sector) investors need to know about NPS withdrawal rules:
 

A. Normal Exit 

You were required to wait till 60 years of age to withdraw your NPS funds. Per the new rules, this vesting period has been changed to 15 years.  

Individuals joining NPS after age 60 do not have to fulfil vesting period.  

For corporate sector, the vesting period remains the same, i.e., till the age of retirement or superannuation. 

 

B. Withdrawal Amount 

The percentage of annuity has been decreased to 20% from 40%. This means you can now withdraw up to 80% of your NPS funds as a lump sum.
  

1. Withdrawal Amount for Corpus ≤ ₹8 Lakh  

  • You can withdraw 100% as a lump sum, Systematic Lump Sum Withdrawal (SLW) and Systematic Unit Redemption (SUR).  
  • You may choose to withdraw 80% as a lump sum and invest at least 20% annuity. 

 

2. Withdrawal Amount for Corpus ₹8 Lakh – ₹12 Lakh

  • You can withdraw up to ₹6 Lakh as a lump sum and balance as SUR for a minimum of 6 years or annuity. 
  • You may choose to withdraw 80% as a lump sum and invest at least 20% annuity. 

 

3. Withdrawal Amount for Corpus > ₹12 Lakh 

  •  You may choose to withdraw 80% as a lump sum and invest at least 20% annuity. 

 

For individuals joining NPS after 60 years of age: 

1. Withdrawal Amount for Corpus ≤ ₹12 Lakh

  • You can withdraw 100% lump sum, SLW or SUR. 
  • You may choose to withdraw 80% as a lump sum and invest at least 20% annuity. 

 

2. Withdrawal Amount for Corpus > ₹12 Lakh

  • You may choose to withdraw 80% as a lump sum and invest at least 20% annuity. 

 

C. Withdrawal Rules in Case of Death 

1. The entire corpus can be withdrawn as a lump sum with the option for annuity, SUR or SLW. 

NPS Withdrawal Rules for Government Sector

A. Withdrawal Amount 

The 60-40 split for government sector individuals has not changed. 
 

1. Withdrawal Amount for Corpus ≤ ₹8 Lakh

  • You can withdraw 100% lump sum, SLW or SUR. 
  • You may choose to withdraw up to 60% as lump sum and invest at least 40% annuity.

 

2. Withdrawal Amount for Corpus ₹8 Lakh – ₹12 Lakh

  • You can withdraw up to ₹6 Lakh as a lump sum and the balance of SUR for a minimum of 6 years or an annuity.
  • You may choose to withdraw up to 60% as lump sum and invest at least 40% annuity. 

 

3. Withdrawal Amount for Corpus > ₹12 Lakh

  • You may choose to withdraw up to 60% as lump sum and invest at least 40% annuity.


B. Withdrawal Rules In Case of Death

Up to 20% of the corpus can be withdrawn, and at least 80% can be invested in an annuity. 
 

1. Withdrawal Amount for Corpus  ≤ ₹8 Lakh

  • 100% lump sum can be withdrawn or invested in SLW or SUR. 

 

2. Withdrawal Amount for Corpus ₹8 Lakh – ₹12 Lakh

  • Up to ₹6 Lakh can be withdrawn as a lump sum, and the balance can be invested in SUR for a minimum of 6 years or annuity. 
  • Or, up to 20% lump sum can be withdrawn, and at least 80% needs to be invested in an annuity. 

 

3. Withdrawal Amount for Corpus > ₹12 Lakh

  • Up to 20% lump sum can be withdrawn, and at least 80% needs to be invested in an annuity.

Rules for Premature Exit

A. Lock-In Period 
 

The previous lock-in period to be eligible for premature exit was 5 years, which has now been removed.
 

B. Withdrawal Amount for Non-Government and Government Sector

You can withdraw up to 80% lump sum and invest at least 20% as annuity.

1. Withdrawal Amount for Corpus ≤ ₹5 Lakh 

  • You may choose to withdraw 100% as lump sum, SLW or SUR.
  • You may also choose to withdraw up to 20% as lump sum and invest at least 80% annuity. 

 

2. Withdrawal Amount for Corpus ≤ ₹5 Lakh

  • You can withdraw up to 20% as lump sum and invest at least 80% annuity. 

Updated Partial Withdrawal Rules

A. Purpose of Partial Withdrawal 
 

  • Home Purchase: You can withdraw NPS funds partially to purchase or construct a house, provided you do not own a house already, other than ancestral property.

  • Medical Treatment: Previously, withdrawal was limited to certain specific critical illnesses. This list now includes all medical treatments and hospitalisations.

  • Settlement of Financial Obligation: You can withdraw funds to settle debt taken from a bank or NBFC against the NPS account, which was used as collateral.
     

B. Amount Calculation: Only the principal amount is considered for partial withdrawals; interest accumulated cannot be withdrawn. Subscribers can withdraw up to 25% of their total contributions.
 

C. Time Frame: Partial withdrawals are allowed only after three years of being a member. 
 

D. Frequency and Limits of Partial Withdrawal

1.Partial Withdrawal Before Age 60

  • You can withdraw partially up to 4 times before 60 years of age. 
  • In each instance, you can withdraw up to 25% of your own contributions. 
  • A minimum gap of 4 years is required between successive partial withdrawals.

 

2. Partial Withdrawal after Age 60

  • If you remain in NPS after 60 years of age, you can partially withdraw funds with a minimum interval of 3 years between consecutive withdrawals. 

Withdrawal Rules for Tier-II NPS Account

You can withdraw funds from your active Tier-II account fully or partially at any time. 

Conclusion

The revised rules by the Pension Fund Regulatory and Development Authority make the National Pension System more flexible, including higher withdrawals and new uses like loan repayment. Since NPS is designed for retirement, ensure you plan withdrawals carefully to avoid impacting your long-term corpus.

Looking to apply for an NPS scheme? Get started here.
 

*Disclaimer: Terms and Conditions apply.  The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.

Table of Content

Frequently Asked Questions

In the event of the subscriber’s death, the nominee can withdraw the corpus as a lump sum or opt for annuity, depending on applicable rules.

The updated NPS rules allow higher lump sum withdrawals, removal of the premature exit lock-in and expanded partial withdrawal purposes, including loan repayment against NPS collateral.

You can withdraw funds fully or partially at any time without restrictions.