How To Withdraw NPS Tier 1 Amount?

The National Pension Scheme (NPS) Tier-1 is the primary retirement account, meant to be a long-term investment. So, how to withdraw NPS tier 1 amount online? Withdrawals from Tier-1 are possible under various circumstances like retirement (maturity), voluntary exit, or for specific reasons (partial withdrawals), subject to conditions.

How to Withdraw NPS Amount Tier 1?

• After being in NPS Tier-1 for at least three years, a subscriber can apply for partial withdrawal. The withdrawal must be for specific valid reasons, such as children’s education, marriage, medical emergencies, or house purchase.

• The amount that can be withdrawn is up to 25% of contributions (not the total corpus) made by the subscriber.  You can use this partial withdrawal facility at most three times during the entire tenure, with a minimum gap of 5 years between two such withdrawals.

When you reach retirement age, the rules are:

• If the accumulated corpus is ≤ Rs. 2 lakh, then you can withdraw the entire amount. If the corpus is more than Rs. 2 lakh, you can withdraw up to 60% of the corpus as a lump sum; the remaining 40% must be used to purchase an annuity (so you get regular pension payments).

• If you wish to exit before retirement after having been in NPS for 10 years, then rules require that in many cases 80% of the corpus is used to buy an annuity and only 20% can be withdrawn as lump sum. 

• If the corpus is small (below a certain threshold, say Rs. 1 lakh), you may be allowed to withdraw the entire amount.

The steps to withdraw NPS amount tier 1 are:

• Log in to the NSDL-CRA (

  https://cra-nsdl.com/CRA/

  ) portal using your PRAN and password. Go to “Transact Online → Withdrawal → Partial Withdrawal” or relevant options. Fill in reasons, percentage or amount, and submit.

• Download the withdrawal/exit form, attach documents (KYC, bank account proof, etc.), and submit through your Point of Presence or POP-SP.

The lump-sum withdrawal portion at retirement (i.e. up to 60% of corpus) is generally exempt from tax. The annuity payments (from the 40%) are taxable as income in the year they are received.

There are several pension schemes initiated by the government to help people save some money that they can use after retirement and so is the NPS or National Pension Scheme. There are two types of tiers available under this scheme: Tier 1 and Tier 2. Tier 1 is meant for people who are doing retirement planning and hence saving money. Tier 2 is for people who want to have an account as a voluntary savings account. If you want to know how to withdraw NPS tier 1 amount, I can help you. There are only a few steps that need to be followed that I am going to share here.

How to withdraw NPS amount tier 1?

• Login to NPS website or click on

  https://enps.nsdl.com/eNPS/NationalPensionSystem.html

• You will be asked to provide PRAN and password so provide it correctly to login 

• You can request withdrawal there and it gets initiated instantly on any business day.

This NPS Tier 1 account matures after the person is of 60 years and can be delayed till you attain 70 years but not after that. Up to 60% of your corous tax free and be withdrawn. You will be then compulsorily required to use the remaining 40% of the corpus to buy an annuity.

I hope this answers: how

to withdraw NPS tier 1 amount.