National Pension System: A recent circular from the pension fund regulator PFRDA (Pension Fund Regulatory and Development Authority) lays out the guidelines for pension withdrawals under the National Pension System (NPS). These clauses will take effect on February 1st, 2024. According to the most recent regulations, members may take up to 25 percent of the money they have contributed to their personal pension account—less the employer’s match.
For the following reasons, partial withdrawals are allowed
- The subscriber’s children, including a child who was legally adopted, went to college.
- union of the subscriber’s offspring, including a child who was adopted formally.
- acquisition or development of a residential home under the subscriber’s sole or joint name.
- Treatment of specific conditions, such as renal failure, cancer, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, coronary artery bypass graft, and others, may involve hospital stays and associated costs.
- Medical and incidental costs associated with the subscriber’s impairment or incapacitation.
- Costs associated with retraining or developing new skills
- costs borne by the subscriber for any start-up or for the creation of their own business.
Conditions for making partial withdrawals
- The NPS subscriber must have been a part of the organisation for at least three years after joining.
- One-fourth of the subscriber’s total contributions in their individual pension account should not exceed the partial withdrawal amount.
- During the course of their subscription, subscribers may make up to three partial withdrawals under the NPS.
Withdrawal Request Submission Process
The subscriber must submit the withdrawal request to the central recordkeeping agency (CRA) through their respective government nodal office or point of presence, together with a self-declaration outlining the reason for the withdrawal, in order for the request to be processed. Only once the subscriber’s bank account has been successfully verified through instantaneous bank account verification techniques like penny drop will CRA begin processing partial withdrawal requests.
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