The National Pension System (NPS) has been in the news recently due to the introduction of new rules that have left many people feeling perplexed and confused. As a long term investment scheme, NPS offers both lump sum amount and pension every month after retirement to its account holders. However, the system does not allow for any withdrawals before retirement, except under certain conditions.
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced new rules this year regarding partial withdrawal from NPS, which have left many people feeling bursty with emotions. Under these new rules, NPS account holders who are employees of the Center, State and Central Autonomous Bodies will be required to apply for partial withdrawal from January 1, 2023, through their concerned nodal officer.
While online withdrawal is allowed for partial withdrawal, members of the private sector will continue to get online facility of partial withdrawal. The time limit for withdrawal from NPS has also been reduced from T4 to T2, which means that instead of four days, the withdrawal process will now be completed in just two days. This has left many people feeling even more perplexed than before.
If you are planning to withdraw money from your NPS account, be aware that you can only withdraw three times, and only 25 percent of the total contribution can be withdrawn. Partial withdrawal from NPS can be made for higher education of children, marriage of children, purchase and construction of flat, serious illness, and other such purposes.
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