To enhance the flexibility and accessibility of funds for subscribers, the [National Pension System (NPS)](https://npstrust.org.in/) has launched a new rule for partial withdrawals. This decision has been taken to balance the need for financial liquidity when needs arise. The aim behind this initiative is to build a steady retirement corpus. In this blog, we shall attempt to explore the various aspects of this new rule. We shall also look into the eligibility criteria, the withdrawal process, and other important details. You can read until the end to gain full insights into the subject matter. 

## What is NPS?

To understand NPS partial withdrawal, let's delve into the meaning of NPS. The [National Pension System (NPS)](https://npstrust.org.in/) is a voluntary, defined contribution towards savings for retirement that enables patrons to make the right decision for the future by generating savings throughout their lives. The NPS (National Pension Scheme) is a great way to save for retirement. Anyone aged 18–70 years, public or private employee, resident or non-resident, can become a part of the National Pension Scheme program. [Section 80CCD(2) of the Income Tax Act](https://www.bajajfinserv.in/section-80-ccd-2) covers the contribution of an employee to the NPS. [Section 80C of the Income Tax Act](https://www.financialexpress.com/money/modi-3-0-budget-2024-80c-deduction-benefits-to-be-extended-to-new-tax-regime-3526770/#:~:text=Old%20Tax%20Regime%3A%20Deductions%20available,Rs%201%2C50%2C000%20per%20annum) covers the tax deduction of ₹1.5 lakh for self-contribution to the National Pension Scheme. [Section 80CCD(1B) of the Income Tax Act](https://cleartax.in/s/section-80-ccd-1b) covers the additional deduction of ₹50,000, which is allowed if a contribution is made towards the NPS. 

Hence, if you are planning your finances to save for the future and have a peaceful life after retirement, you must take this into account. To know more about NPS in detail, read more on our Blog- ["Everything about National Pension System"](https://pensionbox.in/blog/National-Pension-Scheme)

## Eligibility Criteria

The new rule lays out the eligibility criteria for partial withdrawal. **You are eligible if:**

The individuals who have subscribed **must have at least four years of contribution to the NPS** in their names. The limit frame is important in the sense that it gives a guarantee that the subscriber may have accumulated enough funds before accessing the partial withdrawal.

You can access the partial withdrawal in the following cases: -
- 1. Higher education of offspring 
- 2. Marriage of children
- 3. Construction of a residential house or flat, or buying a new house or flat
- 4. Treatment of specified illnesses (cancer, kidney failure, primary immunodeficiency diseases, etc.)
- 5. Disability of the subscriber as a result of an accident.

Subscribers are permitted to withdraw up to 25% of their contributions. This limitation is put in place to ensure that enough money is saved for retirement. Plus, individuals are permitted a **maximum of four partial withdrawals during their entire subscription period**. The objective behind this limitation is to ensure that only necessary withdrawals are made.

## Withdrawal Procedure

The withdrawal procedure as per the new NPS rule is easily understandable and user-friendly. In this section, we shall look into the step-by-step procedure for partial withdrawal. 

### Submission of application

The first step is to submit a partial withdrawal request to the Point of Presence (PoP) like [PensionBox](https://pensionbox.in). Along with that, necessary documents supporting the reason for withdrawal must be attached while submitting.

### Verification of documents

[PensionBox as PoP](https://pensionbox.in) or the NPS Trust will then verify the documents submitted by the subscriber. This step makes sure that the withdrawal is being made for a legitimate reason.

### Approval

When the verification process is completed, the withdrawal request will be approved. Then, the disbursed amount will be credited directly to the subscriber's registered bank account.

### Notification

The subscriber will then receive a notification informing them of the approval and disbursement of the partial withdrawal. This keeps the subscriber informed about the status of their request.

## Benefits of the new rule

- **1. Flexibility:** The new rules offer greater flexibility if you need to access funds for urgent needs.
- **2. Encouragement for Long-Term Savings:** The new withdrawal rule encourages subscribers to stay invested in NPS for the long term. This ensures they have a substantial retirement corpus.
- **3. User-friendly:** The process is user-friendly, especially as it can be done online.

[PensionBox](https://pensionbox.in) aims to empower you with financial knowledge so that you can make the best decisions for your future and lead a stress-free, peaceful life after retirement.

To enhance the flexibility and accessibility of funds for subscribers, the National Pension System (NPS) has launched a new rule for partial withdrawals. This decision has been taken to balance the need for financial liquidity when needs arise. The aim behind this initiative is to build a steady retirement corpus. In this blog, we shall attempt to explore the various aspects of this new rule. We shall also look into the eligibility criteria, the withdrawal process, and other important details. You can read until the end to gain full insights into the subject matter. 

NPS Partial Withdrawal New Rule explained at PensionBox

Other Blogs You Must Read