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NPS Exit

NPS Exit means the closure of subscriber’s NPS account upon, and on the date of any of the following events:

  • Normal exit - The NPS subscriber attains 60 years of age, or salaried NPS subscriber retires from employment, as per their employment terms .
  • Premature exit - Subscriber voluntarily chooses to close their account
  • Death of the subscriber

Rules for NPS Exit

Upon Retirement/Normal Exit

Normal Exit is when the NPS subscriber attains 60 years of age , or salaried NPS subscriber retires from employment, as per their employment terms

  • Withdraw upto 60% of the accumulated corpus funds in lumpsum
  • The remaining 40% of the corpus must be mandatorily used to purchase annuity
  • Upon exit, the subscribers have the option:
    • To continue and contribute towards NPS beyond the retirement age up to 70 years or 10 years from date of retirement whichever is earlier.
    • To continue to stay invested in NPS up to 70 years or 10 years from date of retirement whichever is earlier without making any contribution to their account.
    • To defer the annuity purchase for a maximum period of three years from the date of attaining 60 years.
    • To defer the withdrawal of the lumpsum and continue to stay invested in NPS up to 70 years of age.
    • To withdraw the accumulated corpus in phased manner (up to 10 instalments) post retirement till 70 years or 10 years from date of retirement whichever is earlier. However, the subscriber must purchase annuity before opting for phase withdrawal.
  • If the accumulated wealth in the subscriber account is equal to or less than two lakh Rupees, they have the option to withdraw the entire amount without purchasing annuity
  • The amount withdrawn and the amount used to buy annuity is exempted from tax.

Upon Pre-Mature Exit

Premature exit from NPS is allowed if the subscriber has participated for at least a period of 10 years. If the subscriber decides to exit the NPS prematurely, they can Withdraw 20% of the accumulated corpus in their NPS account

  • The remaining 80% of the corpus must be mandatorily used to purchase annuity

The amount withdrawn and the amount used to buy annuity is exempted from tax.

Upon the death of the subscriber

If the unfortunate of the death of the NPS subscriber, the entire accumulated corpus in the subscriber’s account will be paid to the nominee. The corpus received by the nominee is fully exempted from tax.

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