The PFRDA, through a circular issued on April 9, 2020, declared that coronavirus infection is a critical, life-threatening disease. Consequently, the partial withdrawal of NPS has been allowed to cover expenses related to the treatment of
If you need to withdraw money from your NPS Tier-I account for COVID-19 treatment, this is all you need to know.
For whom can the money be withdrawn?
According to the circular, the money can be withdrawn for the treatment of
Puneet Gupta, Director, People Advisory Services, EY India says: “To perform a partial withdrawal, an individual will be required to provide a medical certificate along with a duly completed form requesting a partial withdrawal.”
Amount that can be withdrawn
Partial NPS withdrawal is permitted for a variety of purposes, such as children’s higher education, marriage of children, purchase or construction of a residential home, and treatment of specific diseases. Under current rules, the amount of money that can be withdrawn from the NPS account cannot exceed 25 percent of the individual’s personal contribution. However, there is an additional condition that must be met to withdraw the money. Gupta says: “Partial withdrawal will be allowed if the subscriber has completed at least three years as an NPS member.
Such partial withdrawal up to 25 percent of the individual’s own contribution is not taxable. “The amount of money that can be withdrawn will depend on the creditworthiness in the subscriber’s NPS Tier-I account. For example, if the subscriber has deposited Rs 1 lakh each year in NPS for four years (excluding any contribution made by the subscriber’s employer), the maximum amount he / she is eligible to withdraw from his / her NPS account will be 25 percent of Rs 4 lakh, is say, Rs 1 lakh. Gupta adds: “Make sure you have not previously exceeded the limit on the number of withdrawals that can be made from the NPS account. The NPS account allows partial withdrawal only for a maximum of three times during the entire holding of the NPS account. ”
Steps to withdraw money
Gupta explains the steps necessary to withdraw money online from the NPS Tier-1 account.
Step 1: Log into your NPS account by visiting https://www.cra-nsdl.com/CRA/. Your user ID will be the PRAN, that is, the permanent retirement account number that was issued to you.
Step 2: Once you have successfully logged into your NPS account, select the “Withdrawal” option in the “Online Transaction” tab as shown on the screen.
Step 3: in the “Withdrawal” option, select the option “Partial withdrawal of level I”.
Step 4: A new web page will open on your screen. You will need to confirm your PRAN. If the PRAN is correct, click “Submit”. The website will ask you to send the system generated form along with the other supporting documents to your Nodal office for further processing.
Step 5: A new tab will open containing details like PRAN, name, date of birth, amount available for withdrawal, etc. You must mention the percentage of withdrawal you want to make. Remember that the maximum withdrawal you can make cannot exceed 25 percent of your contribution. Additionally, you will be asked to select the reason for your partial withdrawal. Click submit. Once submitted, a system generated form will be available for download. You should send this form along with the medical certificate to the nodal office. Once the nodal office processes your request, the money will be credited to your account.