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NPS New Rule: PFRDA has now increased the lump sum withdrawal limit by changing the rules of NPS. It has been made easier for non-government subscribers to withdraw 80 percent of the amount in lump sum instead of 60.
New Delhi. The biggest tension of non-government NPS subscribers is over. Now 80 percent of the retirement corpus can be withdrawn in lump sum. Pension regulator PFRDA has made it easier by changing the NPS withdrawal rules. The NPS Amended Rules, 2025 were notified by the regulator on December 16 and explained how the retirement benefits of NPS will be better for non-government subscribers. All investors and corporate NPS members will also benefit from this.
By changing the biggest rule of NPS, PFRDA has now simplified the requirement of purchasing annuity. Now 20 percent of the amount can be invested to buy annuity. However, this can be done only under certain circumstances. With this change, investors will now get more lump sum amount. Till now, 60 percent of the amount in NPS was available in lump sum, while it was necessary to buy annuity from the remaining 40 percent amount.
How to buy annuity now?
Now the rules of annuity have been changed for non-government subscribers after reaching a certain amount. Now it will be necessary to buy annuity with only 20 percent of the amount, which is used for pension every month after retirement. You can withdraw the remaining 80 percent amount in lump sum. If you do not want to withdraw the money in lump sum, then small amounts can also be withdrawn through systematic unit withdrawal.
When can you withdraw money
Retirement can be applied for under normal withdrawal circumstances. For example, money can be withdrawn on reaching the age of 60 years or on completion of the minimum subscription period. Apart from this, money can be withdrawn anytime between the age of 60 to 85 years.
How is the withdrawal limit decided?
- If the total pension amount exceeds Rs 8 lakh, the subscriber can withdraw 100 percent of the amount in lump sum. If the investor wishes, he can also choose the option of purchasing 20 percent of the amount as annuity and withdrawing 80 percent of the amount in lump sum.
- If the retirement corpus or the total amount is more than Rs 8 lakh but less than Rs 12 lakh, then the subscriber can withdraw Rs 6 lakh in lump sum and can buy an annuity plan with the remaining amount or can withdraw it gradually through systematic unit redemption for the next 6 years.
- When the retirement corpus reaches more than Rs 12 lakh, it will be necessary for the subscriber to buy annuity with 20 per cent of the amount and the remaining 80 per cent can be withdrawn in lump sum.
What was the rule before?
Before this change in NPS rules, it was necessary for non-government subscribers to buy pension annuity with 40 percent of the amount, while the remaining 60 percent of the amount can be withdrawn in lump sum. Now the requirement of purchasing this annuity has been halved and limited to 20 percent. Now it will be easier for non-government subscribers to decide how they want to use their money.
