{"id":7935,"date":"2025-07-16T12:54:42","date_gmt":"2025-07-16T12:54:42","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&#038;p=7935"},"modified":"2025-07-16T12:54:44","modified_gmt":"2025-07-16T12:54:44","slug":"nps-withdrawal","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/nps-withdrawal\/","title":{"rendered":"NPS Withdrawal"},"content":{"rendered":"<p>With the <em>National Pension System (NPS)<\/em>, you save during your working life and withdraw your corpus when needed&#x2014;either after retirement or under certain conditions earlier. Withdrawals can be full, partial, or premature depending on your age, corpus, and reasons.<\/p>\n\n\n\n<h2 id=\"types-of-nps-withdrawals\" class=\"wp-block-heading\">Types of <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nps-withdrawal\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">NPS Withdrawal<\/a>s<\/h2>\n\n\n\n<h3 id=\"partial-withdrawal-tier-i-only\" class=\"wp-block-heading\"><strong>Partial Withdrawal (Tier I only):<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Allowed after <strong>3 years<\/strong> of contribution.<\/li>\n\n\n\n<li>Up to <strong>25% of your own contributions<\/strong> (not total corpus).<\/li>\n\n\n\n<li>Maximum <strong>3 times in total<\/strong>, with <strong>5-year gap<\/strong> between withdrawals.<\/li>\n\n\n\n<li>Valid reasons: children&#x2019;s education\/marriage, house purchase\/construction, critical illness treatment.<\/li>\n\n\n\n<li>These are <strong><a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/tax\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>tax<\/a>-free<\/strong> withdrawals.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"premature-exit-before-60-years-tier-i\" class=\"wp-block-heading\"><strong>Premature Exit (before 60 years, Tier I):<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Must have been in NPS for <strong>at least 10 years<\/strong>.<\/li>\n\n\n\n<li>You can withdraw <strong>20% of total corpus<\/strong> as <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/lump-sum\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">lump sum<\/a>; <strong>80% must buy annuity<\/strong>.<\/li>\n\n\n\n<li>The lump sum and pension from annuity are both <strong>taxable<\/strong> as per income slab.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"normal-exit-at-or-after-60-years-tier-i\" class=\"wp-block-heading\"><strong>Normal Exit (at or after 60 years, Tier I):<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You can withdraw <strong>up to 60%<\/strong> of corpus as lump sum.<\/li>\n\n\n\n<li>Remaining <strong>40% must purchase annuity<\/strong>.<\/li>\n\n\n\n<li>Lump sum withdrawal is <strong>tax-free<\/strong>; annuity payouts are <strong>taxable when received<\/strong>.<\/li>\n\n\n\n<li>If your corpus is <strong>&#x2264;&#x202F;&#x20B9;5 lakh<\/strong>, you may withdraw the <strong>entire amount<\/strong> as lump sum; annuity is optional. However, up to 40% may still be taxable.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"tier-ii-withdrawal\" class=\"wp-block-heading\"><strong>Tier II Withdrawal:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No withdrawal restrictions.<\/li>\n\n\n\n<li>Can withdraw anytime, any amount.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"online-withdrawal-steps-tier-i\" class=\"wp-block-heading\">Online Withdrawal Steps (Tier I)<\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Log in<\/strong> to your CRA portal (<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nsdl\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>NSDL<\/a>\/Protean) using <strong>PRAN and IPIN<\/strong>.<\/li>\n\n\n\n<li>Go to <strong>&#x201C;Transact Online&#x201D; &#x2192; &#x201C;Withdrawal&#x201D;<\/strong>.<\/li>\n\n\n\n<li><strong>Select the type<\/strong> of withdrawal (partial\/premature\/normal).<\/li>\n\n\n\n<li><strong>Fill details<\/strong>, upload proofs (e.g., education invoice, illness documents) if partial.<\/li>\n\n\n\n<li><strong>Submit online<\/strong> and\/or verify via your PoP provider.<\/li>\n\n\n\n<li>Amount is <strong>credited to your bank<\/strong> via ECS in 3&#x2013;30 days.<\/li>\n<\/ol>\n\n\n\n<h2 id=\"offline-withdrawal\" class=\"wp-block-heading\">Offline Withdrawal<\/h2>\n\n\n\n<p>Download the relevant form (<strong>UOS-S13\/S14<\/strong>), attach documents, submit via PoP-SP branch. PoP verifies and processes the payout similarly.<\/p>\n\n\n\n<h2 id=\"taxation-overview\" class=\"wp-block-heading\">Taxation Overview<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Partial withdrawal:<\/strong> Tax-free up to 25% of own contributions.<\/li>\n\n\n\n<li><strong>Premature exit:<\/strong>\n<ul class=\"wp-block-list\">\n<li>20% withdrawn taxed as per slab; annuity payments taxable later.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Normal exit:<\/strong>\n<ul class=\"wp-block-list\">\n<li>60% lump sum tax-exempt; annuity taxable at payout.<\/li>\n\n\n\n<li>Full withdrawal (&#x2264;&#x202F;&#x20B9;5 lakh corpus): entire withdrawal potentially taxable or partly tax-free based on rules.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 id=\"quick-comparison-table\" class=\"wp-block-heading\">Quick Comparison Table<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th><strong>Type<\/strong><\/th><th><strong>Minimum Tenure<\/strong><\/th><th><strong>Withdrawal %<\/strong><\/th><th><strong>Annuity Required<\/strong><\/th><th><strong>Tax Treatment<\/strong><\/th><\/tr><\/thead><tbody><tr><td>Partial (Tier I)<\/td><td>3 years<\/td><td>&#x2264;&#x202F;25% of self-contrib.<\/td><td>No<\/td><td>Tax-free<\/td><\/tr><tr><td>Premature Exit<\/td><td>10 years<\/td><td>20% of corpus<\/td><td>Yes (80%)<\/td><td>Lump sum taxable; annuity taxable later<\/td><\/tr><tr><td>Normal Exit (&#x2265;60 yrs)<\/td><td>60 years<\/td><td>60% corpus<\/td><td>Yes (40%)<\/td><td>Lump sum tax-free; annuity taxable later<\/td><\/tr><tr><td>Full Exit &#x2264;&#x20B9;5L corpus<\/td><td>N\/A<\/td><td>100% corpus<\/td><td>Optional<\/td><td>May be taxable (depending on rule)<\/td><\/tr><tr><td>Tier II<\/td><td>N\/A<\/td><td>Any time, any amount<\/td><td>N\/A<\/td><td>Depends on account type<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"final-takeaway\" class=\"wp-block-heading\">Final Takeaway<\/h2>\n\n\n\n<p>NPS offers flexible withdrawal options&#x2014;partial, premature, or full&#x2014;with varying tax impacts. <strong>Partial withdrawals are tax-free<\/strong>, lump sums upon retirement are mostly exempt, but annuity payouts and premature exits may be taxable. Withdrawals can be done <strong>online via CRA portal<\/strong> or offline through PoP. Ensure you meet tenure and documentation requirements to avoid delays or reversals.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the National Pension System (NPS), you save during your working life and withdraw your corpus when needed&#x2014;either after retirement or under certain conditions earlier. Withdrawals can be full, partial, or premature depending on your age, corpus, and reasons. Types of NPS Withdrawals Partial Withdrawal (Tier I only): Premature Exit (before 60 years, Tier I): [&#x2026;]<\/p>\n","protected":false},"author":9,"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"class_list":["post-7935","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7935","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/9"}],"version-history":[{"count":1,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7935\/revisions"}],"predecessor-version":[{"id":7936,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/7935\/revisions\/7936"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=7935"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}