How to withdraw money from NPS? - 3 easy ways

Despite being a long-term investment scheme, the National Pension System (NPS) offers the flexibility to withdraw money when needed. However, this can only be done under certain conditions and with the right guidance. This beginner’s guide will help you know how to withdraw money from NPS, the NPS withdrawal rules, tax implications, allowing you to access your funds with ease and confidence.

How to withdraw money from the NPS Scheme?

A number of aspects need to be considered when withdrawing money from NPS. The type of NPS account you hold and the mode of withdrawal significantly impact the answer to how to withdraw from NPS. For this reason, you must adhere to the specified guidelines to make a smooth, hassle-free and tax-efficient pension withdrawal.

How to withdraw NPS Tier 1 online

1. Open the NSDL CRA portal.
2. Enter your PRAN (Permanent Retirement Account Number) in the User ID column.
3. Enter your password and the given captcha and mark the checkbox.
4. Click on “Submit”.
5. Select” Initiate Withdrawal Request” and choose “Partial Withdrawal from Tier I” option.
6. Provide the required details and enter the percentage of funds you wish to withdraw.
7. Click on “Submit”.
8. After submitting the request, print the form and attach your photograph to it.
9. Submit the form and all KYC documents to your PoP Service Provider to withdraw funds.

How can I withdraw money from NPS Tier 1 Account offline

1. Download Form 601 for partial withdrawal or Form 101 for lump sum fund withdrawal from NSDL’s website.
2. Print and fill out this form with accurate information.
3. Attach the required documents.
4. Submit this form to your PoP service provider to initiate your retirement funds withdrawal.

How to withdraw NPS money from Tier 2 online

1. Download Form UOS S12.
2. Print the downloaded form and fill it out with the correct information.
3. Attach the supporting documents.
4. Submit the form to your PoP service provider.
5. Upon receiving the form, your PoP service provider will verify your personal and pension savings details and execute the withdrawal request accordingly.

Tax implications on NPS withdrawal

Unlike the Tier I account, the Tier II account does not offer any tax benefits on money withdrawals. Thus, withdrawals made from Tier II accounts are liable for taxation.

Time period for NPS withdrawal

Also Read: How to invest in NPS (National Pension System)?

FAQs

Can we withdraw the NPS amount anytime?

No, you cannot withdraw the NPS amount from a Tier I account at any time, as there are some conditions and restrictions. However, if you have a Tier II account, you can withdraw the funds without any restrictions.

How can I close my NPS account and withdraw money?

To close your NPS account, you have to initiate a withdrawal request through the NSDL CRA portal and visit your PoP service provider with a physical copy of the withdrawal form and other KYC documents.

What are the requirements for making partial withdrawal from a Tier 1 account?

To make a partial withdrawal from a Tier 1 account, you must have been an NPS subscriber for at least 3 years from the date of joining. Plus, you cannot make more than 3 withdrawals in your NPS tenure.

How to check the status of an NPS withdrawal request?

You can check the status of an NPS withdrawal request by visiting the NSDL CRA or KFINTECH website, depending on your CRA.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.