Premature exit from NPS: Benefits you get for withdrawing from NPS before attaining the age of 60 years

Employees contributing to NPS are eligible for following tax benefits on their own contribution:

Tax deduction up to 10% of salary (Basic + DA) under section 80 CCD(1) within the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

Tax deduction up to ?50,000 under section 80 CCD(1B) over and above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

Tax benefits to employees on Employer’s contribution

Eligible for tax deduction up to 10% of pay (Basic + DA) (14% if such contribution is paid by the Central Government) provided by the employer under Section 80 CCD(2) in excess of the Rs. 1.50 lakh limit granted by Section 80 CCE.

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Annuitization – Minimum of 80% of accumulated pension wealth will be utilized for monthly annuity or pension.

Lumpsum – Remaining 20% of accumulated pension wealth will be paid to the subscriber.

You can completely withdraw accumulated pension wealth without annuitization, if your accumulated pension wealth is equal to or less than a sum of two lakh fifty thousand rupees.

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If your accumulated pension wealth exceeds two lakh fifty thousand rupees and your age is less than the minimum age required to purchase any annuity from any of the accredited annuity service providers, you will remain in NPS until you reach the age of eligibility to purchase any annuity. After reaching the minimum age for obtaining an annuity, you can select the annuity of your choosing.

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you are eligible for exit from NPS in case of physical incapacitation or suffering bodily disability leading to incapability to continue under NPS.

According to the NPS, “A disability certificate from a Government surgeon or doctor (treating such disability or invalidation of subscriber) stating the nature and extent of disability and also certifying that: (a). the affected subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected subscriber, being not able to work for the remaining period of his life.; and (b). Percentage of disability is more than seventy-five percent in the opinion of such Government surgeon or doctor (treating such disability or invalidation of subscriber).”

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Pre-mature exit after mandatory lock-in period

Death of subscriber before the age of 60 years

Superannuation or till age of 60 years, whichever is earlier

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