New NPS partial withdrawal rule: The Pension Fund Regulatory and Development Authority (PFRDA) allows subscribers to make partial withdrawals from their National Pension System (NPS) for specific purposes.
The PFRDA circular dated January 12, 2024, states that subscribers can make partial withdrawals for purposes such as higher education, marriage, residential house purchase, and medical expenses.
According to the circular issued by the authority dated January 12, 2024, “This Master Circular shall take effect from 01 February 2024 but shall be without prejudice to their (earlier issued circulars) operation and effect, for the period when they were in force, until them being subsumed under the Master Circular.”
NPS: Partial withdrawals are allowed for the following purposes
-Higher education of the subscriber’s children, including a legally adopted child.
-Marriage of the subscriber’s children, including a legally adopted child.
-Purchase or construction of a residential house or flat in the subscriber’s name or in joint name with their legally wedded spouse. However, if the subscriber already owns a residential house or flat (other than ancestral property), no withdrawal shall be permitted.
-Treatment of specified illnesses, including hospitalization and treatment expenses for diseases such as cancer, kidney failure (End Stage Renal Failure), primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, coronary artery bypass graft, aorta graft surgery, heart valve surgery, stroke, myocardial infarction, coma, total blindness, paralysis, accidents of serious/life-threatening nature and Covid-19.
-Medical and incidental expenses arising from the disability or incapacitation suffered by the subscriber.
-Expenses incurred by the subscriber for skill development/re-skilling or any other self-development activities.
-Expenses incurred by the subscriber for the establishment of her/his own venture or any start-ups.
NPS: Eligibility Criteria, Limit, and Frequency for Availing Partial Withdrawal
-The subscriber should have been a member of the National Pension System for at least three years from the date of joining.
-The partial withdrawal amount should not exceed twenty-five percent of the subscriber’s total contributions in their individual pension account, excluding the Page 5 of 6 employer’s contribution, as of the date of application for withdrawal. Returns generated on the contributions shall not be eligible for partial withdrawal.
-A subscriber is allowed to make a maximum of three partial withdrawals during their entire subscription tenure under the National Pension System. For subsequent partial withdrawals, only incremental contributions made by the subscriber from the date of the previous partial withdrawal shall be allowed.
NPS: Submission of Withdrawal Request
The subscriber should submit the withdrawal request along with a self-declaration stating the purpose for the withdrawal to the central recordkeeping agency through their respective Government Nodal Office or Point of Presence, as the case may be. In the case where a subscriber is suffering from any illness specified in para 6(d) of this master circular, the withdrawal request may be submitted by any family member of such subscriber.
NPS: Processing and Verification
Point of Presence or Government Nodal Office, as the case may be, upon receiving the withdrawal request, shall take the necessary steps to identify the beneficiary. Partial withdrawal requests shall be processed by CRA, only post successful verification of the subscriber’s bank account through “Instant Bank Account verification” using methods such as penny drop or any other latest technology upgrade.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
More
Less
Published: 29 Jan 2024, 03:09 PM IST
