The Pension Fund Regulatory and Development Authority (PFRDA) had changed the rules for partial withdrawal from NPS. NPS is in a government investment scheme. It is considered a long time investment plan. Those investing in NPS get the benefit of deduction under 80C.
National Pension (NPS) is one of the most preferred investment options for creating a retirement fund. Lakhs of people of the country have invested in this government scheme. NPS is considered a long time investment. In this scheme, you deposit money during the job, which you get in the form of pension after retirement.
There has been a change in the rules for withdrawal of money from NPS since last month. The Pension Fund Regulatory and Development Authority (PFRDA) had issued new rules for partial withdrawal from the National Pension System, which has come into effect from January 1, 2023.
Nodal officers will have to give information
PFRDA has asked all central government employees to submit partial withdrawal applications through their respective nodal offices from January 1, 2023. These rules are for the employees of Central, State and Central Autonomous Body. Therefore, now the investors of NPS will have to tell the reasons for premature withdrawal to the nodal officers. Along with this, related documents will also have to be presented.
What are the rules for partial withdrawal?
PFRDA allowed partial withdrawal to investors under self-declaration during the Kovid epidemic. The National Pension System allows premature withdrawal to the subscribers before maturity or only after completion of three years. However, the amount of withdrawal cannot exceed 25 percent of the total contribution.
Premature withdrawal from NPS can be done only for higher education of children, marriage of children, purchase/construction of house and treatment of serious diseases. An investor in NPS can make partial withdrawals only three times during the entire tenure.
Get tax exemption
People from the age of 18 years to 60 years can start investing in NPS. This scheme is directly related to the government. An investor in NPS gets the benefit of deduction under 80C. Apart from this, income tax exemption of up to Rs 50,000 is also available under 80CCD. The investor gets the money deposited in NPS in two ways.
The first is that you can withdraw a limited part of the deposited amount in one go, while the second part will be deposited for pension. Annuity will be purchased from this amount, the more amount you leave to buy annuity, the more pension you will get after retirement.
