National Pension System withdrawal for Coronavirus: How to withdraw from NPS due to COVID-19 – 5 points

Updated: April 24, 2020 8:09:11 AM

National Pension System Withdrawal Rules for Coronavirus: Partial withdrawal from NPS can be made by the NPS subscriber for his/her treatment, or for treatment of legally wedded spouse, children, including a legally adopted child or dependent parents.

NPS withdrawal for COVID-19: In view of hardships faced by people due to Coronavirus pandemic, the Pension Fund Regulatory Development Authority of India (PFRDA) has allowed account holders to make partial withdrawals from the National Pension System (NPS). A partial withdrawal from NPS can be made by the NPS subscriber for his/her treatment, or for treatment of legally wedded spouse, children, including a legally adopted child or dependent parents.

“In view of the decision of Government of India, which has declared COVID-19 as a pandemic, It has been decided to declare “COVID-19” as a critical illness which is life-threatening in nature. Hence, in view of the above, the partial withdrawals shall be permitted to fulfil financial needs of the subscribers, if required to him/her against the request placed for partial withdrawals towards treatment of illness of subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents as mentioned in regulation 8(1)(A)(d) of the said regulations,” a PFRDA circular to all stakeholders and subscribers of NPS had said on 9th April, 2020.

If you want to make a partial withdrawal from NPS for the above-mentioned purposes, here are five important points you should know:

1. Apart from the withdrawal purposes mentioned above, the remaining conditions for partial withdrawal from NPS remains same as mentioned under regulation 8 of the PFRDA (Exits and withdrawals under NPS) Regulations, 2015 and amendments thereafter.
2. Documents required: For partial withdrawals, you need to provide the following documents:  a. Medical Certificate; b. Formal request for partial withdrawal
3. Under Rule (8) of the regulations, a partial withdrawal of accumulated pension wealth of the subscriber, not exceeding twenty-five per cent of the contributions made by the subscriber and excluding contribution made by the employer, if any, at any time before exit from National Pension System is allowed.
4. According to the regulations, the subscriber will be allowed to withdraw an amount not exceeding twenty-five per cent of the contributions made by him to his individual pension account. Previously, this was allowed only for higher education of children, their marriage, construction or purchase of a residential house or flat, for treatment of specified illness.
5. For partial withdrawal, the subscriber should be in NPS for at least three years, according to NSDL, a CRA for NPS, website. The partial withdrawal can be made for a maximum of three times during the entire tenure of subscription. The subscriber can make request for partial withdrawal started online.