NPS Premature Exit Rules: How to Withdraw Your Investment Before 60 and Get Money in 3 Days
NPS Premature Exit Rules are often misunderstood, leaving many subscribers unsure about whether they can access their retirement savings before the age of 60. While the National Pension System (NPS) is designed as a long-term retirement scheme, the Pension Fund Regulatory and Development Authority (PFRDA) does allow subscribers to exit the scheme early under specific conditions. If you are planning to close your NPS account before maturity, here is a complete guide to the eligibility, withdrawal limits, and online application process.
Why Are Many NPS Subscribers Considering Early Exit?
The National Pension System gained popularity among private-sector employees due to the additional tax deduction available under Section 80CCD(1B) of the Income Tax Act. Under the earlier tax regime, investors could claim an extra deduction of up to ₹50,000 by investing in NPS.
However, with many taxpayers shifting to the new income tax regime - where this additional deduction is not available - some subscribers are reconsidering their NPS investments. As a result, interest in understanding premature withdrawal rules has increased significantly.
Can You Close an NPS Account Before the Age of 60?
Yes. Subscribers are allowed to close their NPS account before turning 60, provided they follow the premature exit guidelines prescribed by PFRDA.
The entire process has now become digital, making it easier for account holders to submit an exit request without visiting any office. Once the request is successfully processed, the eligible amount is generally credited to the registered bank account within two to three working days.
When Can You Withdraw 100% of Your NPS Corpus?
The amount you can withdraw depends on the total value of your NPS corpus at the time of premature exit.
If Your NPS Balance Is ₹2.5 Lakh or Less
Subscribers whose total accumulated corpus, including investment returns, is ₹2.5 lakh or below can withdraw the entire amount as a lump sum. There is no requirement to purchase an annuity plan in this case.
If Your NPS Balance Exceeds ₹2.5 Lakh
If the accumulated corpus is more than ₹2.5 lakh, the withdrawal rules change.
Why Are Many NPS Subscribers Considering Early Exit?
The National Pension System gained popularity among private-sector employees due to the additional tax deduction available under Section 80CCD(1B) of the Income Tax Act. Under the earlier tax regime, investors could claim an extra deduction of up to ₹50,000 by investing in NPS.
However, with many taxpayers shifting to the new income tax regime - where this additional deduction is not available - some subscribers are reconsidering their NPS investments. As a result, interest in understanding premature withdrawal rules has increased significantly.
Can You Close an NPS Account Before the Age of 60?
Yes. Subscribers are allowed to close their NPS account before turning 60, provided they follow the premature exit guidelines prescribed by PFRDA.
The entire process has now become digital, making it easier for account holders to submit an exit request without visiting any office. Once the request is successfully processed, the eligible amount is generally credited to the registered bank account within two to three working days.
When Can You Withdraw 100% of Your NPS Corpus?
The amount you can withdraw depends on the total value of your NPS corpus at the time of premature exit.
If Your NPS Balance Is ₹2.5 Lakh or Less
Subscribers whose total accumulated corpus, including investment returns, is ₹2.5 lakh or below can withdraw the entire amount as a lump sum. There is no requirement to purchase an annuity plan in this case.
If Your NPS Balance Exceeds ₹2.5 Lakh
If the accumulated corpus is more than ₹2.5 lakh, the withdrawal rules change.
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