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NPS Rules: NPS is a retirement scheme where funds remain locked until the age of 60. However, the account can be closed via premature exit subject to certain conditions.

National Pension System Exit Rules: Many people wonder whether they can withdraw their entire corpus from the National Pension System (NPS) before turning 60—especially those in private-sector jobs who invested in NPS to save on taxes. Such individuals often consider closing the account and withdrawing funds during emergencies but frequently get confused due to a lack of awareness regarding the actual rules.

In reality, NPS is a long-term retirement scheme where funds are generally locked until the age of 60. While you *can* opt for a premature exit (i.e., close your account) before that age, there are specific conditions you must be aware of.

What are the rules for withdrawing money from NPS?

If the total amount accumulated in your NPS account is ₹2.5 lakh or less, you can withdraw the entire sum at once; there is no requirement to invest in a pension (annuity) plan. However, if the total amount exceeds ₹2.5 lakh—even by a single rupee—you cannot withdraw the entire corpus in one go. In such cases, the following rules apply:

At least 80% of the amount must be invested in a pension (annuity) plan.
Only 20% of the amount can be withdrawn as a lump sum.

Confusion regarding the ₹5 lakh limit

Many people mistakenly believe that the entire amount can be withdrawn if the corpus is up to ₹5 lakh. This is incorrect. The facility to withdraw the full amount is available only upon 'normal exit' after completing 60 years of age, not during a premature exit.

How to apply?

Withdrawing funds from the NPS has now become a completely online and simple process. You can do this by logging into the CRA (Protean) portal and selecting the 'Exit from NPS' option.

For this application, you are required to upload documents such as your Aadhaar, PAN card, and bank details. The application process is completed following verification via OTP or Aadhaar e-Sign. The funds are credited directly to your bank account within three working days of submitting the application.