NPS Withdrawal Rules
A complete guide to NPS exit options — normal retirement, premature exit, partial withdrawal, and deferment. Updated with PFRDA Amendment Regulations dated December 15, 2025.
Normal Exit at Age 60 (Superannuation)
When you reach 60 (or the age of superannuation for government employees), you can exit NPS. The split between lump sum and annuity depends on your subscriber type:
| Parameter | Non-Govt Subscribers | Govt Subscribers |
|---|---|---|
| Max lump sum | 80% of corpus | 60% of corpus |
| Mandatory annuity | Min 20% of corpus | Min 40% of corpus |
| Tax-free portion | 60% of total corpus | 60% of total corpus |
The withdrawal amount also depends on your total corpus size:
| Corpus Size | Withdrawal Rule |
|---|---|
| ₹8 lakh or less | 100% lump sum withdrawal allowed (no mandatory annuity) |
| ₹8 lakh to ₹12 lakh | Can withdraw entire amount that would go to annuity as lump sum, subject to conditions |
| Above ₹12 lakh | Must follow standard lump sum / annuity split as per subscriber type |
Premature Exit (Before Age 60)
If you need to exit NPS before turning 60, the rules differ based on your subscriber model:
- All Citizen Model (non-govt, including NRIs): The mandatory lock-in period has been removed as per the December 2025 PFRDA amendments. You can exit at any time.
- Government subscribers: Can exit prematurely upon resignation, VRS, or separation from service (not voluntary exit while still employed).
Premature exit withdrawal rules:
| Corpus Size | Rule |
|---|---|
| ₹2.5 lakh or less | 100% lump sum withdrawal — no annuity required |
| Above ₹2.5 lakh | Max 20% as lump sum, min 80% must be used for annuity |
Note: The premature exit split is reversed compared to normal exit — you get only 20% as lump sum (vs 80% at normal exit for non-govt). This is intentionally designed to discourage early exits and protect your retirement corpus.
Partial Withdrawal
NPS allows partial withdrawals from your Tier I account without closing it, subject to specific conditions:
- Amount: Up to 25% of your own contributions (employer contributions not counted).
- Frequency: Maximum 4 times during the entire tenure of the account.
- Minimum tenure: At least 3 years from the date of joining NPS.
- Tax treatment: Partial withdrawals are tax-free up to 25% of own contributions.
Partial withdrawals are allowed only for these specific purposes:
- Higher education of children (including legally adopted children)
- Marriage of children (including legally adopted children)
- Purchase or construction of a residential house (first house only; if subscriber already owns a house, this purpose is not available)
- Treatment of specified illnesses — for self, spouse, children, or dependent parents. The list of illnesses has been expanded in the Dec 2025 amendments to cover a broader range of medical conditions.
Dec 2025 change: The earlier permitted purpose of “skill development/re-skilling” has been removed. Medical treatment purposes have been expanded to include dependent parents and a wider list of illnesses.
Death of Subscriber
In the event of the subscriber's death (at any age, before or after 60):
- 100% of the corpus is paid to the nominee as a lump sum.
- There is no mandatory annuity requirement — the nominee receives the full amount.
- The entire amount received by the nominee is tax-free.
- If no nomination exists, the legal heir can claim the corpus by submitting a succession certificate.
Deferment Options
You are not required to withdraw your NPS corpus immediately at 60. You can defer withdrawal:
- Lump sum deferment: Defer the lump sum portion up to age 85. Your corpus continues to be invested and grow.
- Annuity deferment: Defer the annuity purchase up to age 85.
- Systematic Lump Sum Withdrawal (SLW): Instead of a one-time lump sum, receive the amount in installments (monthly, quarterly, half-yearly, or annually) until age 85.
- Continued contributions: You can continue contributing to NPS up to age 75 even after the normal exit age of 60.
SLW benefit: Systematic withdrawal helps manage tax liability by spreading the taxable portion across multiple financial years instead of receiving it all in one year.
Frequently Asked Questions
Can I withdraw 100% of my NPS corpus at 60?
Only if your total corpus is ₹8 lakh or less. If your corpus is between ₹8-12 lakh, you can withdraw the full amount that would otherwise go to annuity (subject to conditions). For corpus above ₹12 lakh, you must purchase an annuity with the mandatory portion (20% for non-govt, 40% for govt).
What happens if I stop contributing to NPS before 60?
For the All Citizen Model, the lock-in requirement has been removed (as per Dec 2025 amendments). You can exit at any time. If corpus is ₹2.5 lakh or less, full withdrawal is allowed. Otherwise, at least 80% must be used for annuity purchase with the remaining as lump sum.
Can I take partial withdrawal for any reason?
No. Partial withdrawal is allowed only for specified purposes: children’s higher education or marriage, purchase/construction of a residential house, treatment of specified illnesses (including for self, spouse, children, or dependent parents), and meeting expenses for treatment of disability. The purpose of “skill development” has been removed in the Dec 2025 amendments.
What happens to my NPS account if I die before 60?
100% of the corpus is paid to the nominee as a lump sum. There is no mandatory annuity requirement in case of death. The entire amount received by the nominee is tax-free.
Can I defer my NPS withdrawal beyond 60?
Yes, you can defer withdrawal of the lump sum portion up to age 85. During the deferment period, your corpus continues to be invested. You can also opt for Systematic Lump Sum Withdrawal (SLW) — receiving the lump sum in installments until age 85 instead of a one-time withdrawal.
Disclaimer: NPS withdrawal rules are governed by PFRDA regulations and are subject to change. The information above reflects the PFRDA (Exits and Withdrawals under National Pension System) Amendment Regulations, 2025, dated December 15, 2025. Consult PFRDA or your POP for the latest rules.
