NPS has made provision for two types of accounts. The first account is Tier-1 and the second is Tier-2 account. Tier-1 is called the main retirement account. From which one can withdraw the deposited money even before retirement with certain conditions.
National Pension System (NPS) has brought good news for people. People invest their money in retirement funds so that there is no financial insecurity after retirement and life can be spent in a pleasant and easy way. But sometimes situations arise in life that people are in dire need of money, and it becomes necessary to withdraw money from retirement savings. To deal with such a situation, National Pension System (NPS) has brought some new provisions, under which one can withdraw his money with some conditions.
You can withdraw your money after three years.
NPS has made two types of provisions. The first account is Tier-1 and the second is Tier-2 account. Tier-1 is called the main retirement account. From which one can withdraw his deposited money even before retirement with some conditions. For this withdrawal, the account must be at least three years old, only after this you can withdraw your deposited money from it. That too, only up to 25 percent can be withdrawn from this account. However, the interest earned on the contribution cannot be withdrawn.
Apart from this, there are some other situations in which people can withdraw money from this account. For example, if there is a need for treatment of any disease, money is needed for children’s education, for a wedding ceremony or to start a new venture, then also money can be withdrawn. The Type-2 account is kept away from withdrawal restrictions. This is completely a savings account.
You can withdraw your money even before maturity
If anyone wants, he can choose to completely exit NPS even before the age of 60 years. Provided that for this one has to wait for 5 years, before that one cannot exit NPS. Also, only 20 percent of the total deposit amount can be withdrawn once or in lump sum. But the remaining 80 percent of the money must be invested to buy annual plans from life insurance companies. However, if the total deposit amount is less than 2.5 lakhs, then this money can be withdrawn together.
Final withdrawal
When the age is 60 years, 60 percent of the money can be withdrawn from NPS in one go. On which no tax will have to be paid. The remaining 40 percent will have to be compulsorily converted into annuities and it will be taxable at the slab rate applicable to the total income.
Withdrawal of money in a phased manner
All NPS members will have the option to withdraw money monthly, quarterly, half-yearly and yearly till the age of 75 years. It was launched in the year 2023 with the Lump-Sum Withdrawal (SLW) facility.
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