How To Withdraw Funds From NPS After Retirement

(Last Updated On: October 6, 2016)

NPS is a defined retirement plan that needs to be financed till the age of 60 years. Once the subscriber attains the age of 60 years, he/she can apply for withdrawal.  A few years back, you could not make a premature withdrawal. Thanks to recent reforms, NPS is offering partial withdrawal with specific terms.

You must be near to retirement; that’s why you landed here. Yes, we are going to explain withdrawal process. Before we jump into process details, you must have an idea about withdrawal terms and rules. Let’s check them out first and then proceed to withdrawal process!

NPS Withdrawal Rules

Different rules apply to different categories.

Withdrawal Rules For Government Officials


  • The subscriber needs to invest 40% in the annuity as compulsory. You can withdraw rest of amount in lump sum.
  • You can delay the lump sum withdrawal till the age of 70 years
  • If the amount is less than Rs. 2 Lacs, you can withdraw the entire amount.

Voluntary Retirement

  • You have to use 80% of funds to purchase annuity
  • If the amount is less than Rs. 1 Lacs, you can withdraw the complete amount.

Death Of Subscriber

  • If the subscriber dies before retirement, the nominee or legal heir should invest 80% of the amount in the annuity.
  • Complete withdrawal is allowed if an amount is less than Rs. 2 Lacs.

Withdrawal Rules For Private Sector Employees


  • You have to invest 40% in annuity and can withdraw rest of amount in lump sum.
  • Lump sum withdrawal can be avoided till the age of 70 years.
  • You may choose to make the lump sum withdrawal if the amount is less than Rs. 2 Lacs.
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Voluntary Retirement

  • The rules apply if the account is maintained for ten years.
  • You must use 80% of amount to purchase annuity
  • If the accumulated funds are lower than Rs. 1 lacs, you may opt for the complete withdrawal.

Death Of Subscriber

In this case, the nominee or legal heir can withdraw the entire amount as lump sum.

Partial Withdrawal Rules

  • You must have maintained account for ten years
  • You can make only 3 withdrawal during the subscription period
  • There should be a gap of 5 years between two consecutive withdrawals.
  • You can withdraw only 25% of your contribution towards NPS
  • Premature withdrawal is allowed for emergencies like higher education, marriage expenses, medical emergencies or house construction, etc.

Withdrawal Steps

  • First off, Get the withdrawal form. If you are a regular subscriber, get the Form 301. Form 501 is required to make withdrawal in case of NPS-Lite.
  • You need to attach multiple documents with the withdrawal form. Such as a covering letter issued by associated POP, Original PRAN card, KYC documents ( attested by POP) and canceled cheque.
  • Once you have filled the form with necessary details, submit it to the associated POP along with required documents. POP will further submit the form to the Central Record Keeping Agency.
  • You will receive an Exit Claim ID six months before retirement. This signifies the reference point for withdrawal request.
  • Once the application is approved, the withdrawal proceeds will be transferred to your bank account.

In case you want further details about NPS, please check this Guide On National Pension Scheme!

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