NPS Withdrawal New Rules 2021
There is good news for pensioners. The Pension Fund Regulatory and Development Authority (PFRDA) has approved a proposal to withdraw their full funds for subscribers of the National Pension System (NPS), saying that the total pension corpus of consumers is Rs. If they have Rs 5 lakh or less, they can withdraw all the amount without buying an annuity. Buying an annuity here means buying a pension plan from insurance companies.
What was the rule before?
Currently if NPS subscribers whose total corpus was more than Rs 2 lakh. At the time of retirement or 60 years later, he had to buy annuities from insurance companies. Subscribers could withdraw 60% of their total money but the remaining 40% annuity had to be purchased.
NPS subscribers could withdraw money from their account only after three years but there were certain conditions for this. In case of withdrawal before maturity this amount cannot exceed 25% of the total contribution. This partial withdrawal can be done for children's education, children's marriage, buying a house or treating a serious illness. NPS subscribers can only make partial withdrawals three times during the entire tenure. One thing to keep in mind is that all these withdrawals are absolutely tax free under income tax rules.
Will subscribers' pension rights expire?
In this regard, PFRDA said that after full withdrawal, the consumer will be deprived of the right to receive any pension or other amount from the government or employer under NPS. In addition, the pension regulator has also given more relief to consumers. In a gadget notification, PFRD said that the unit withdrawal limit in NPS was increased before maturity, earlier subscribers could withdraw Rs 1 lakh but now they can withdraw Rs 2.5 lakh.
Exemption given in age limit
Pension regulator PFRDA has raised the age limit for entry into the National Pension System from 65 years to 70 years, meaning that even those over 70 years of age can start investing in NPS. While the exit limit has been reduced by PFRDA to 75 years. That is, they can now continue the NPS account till the age of 75 years. The maturity limit for all other subscribers is 70 years.
What did PFRDA say?
According to the pension regulator PFRDA, the amount of pension accumulated in a permanent retirement account will be an option for subscribers to withdraw Rs 5 lakh or less or in full as per the limit fixed by the authority.
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