You can now withdraw money from NPS in installments: Have you read these 10 new rules of the National Pension System?

Now, withdrawing money from NPS after retirement has become easier and more flexible. Similar to the Systematic Withdrawal Plan (SWP) in mutual funds, NPS now offers the Systematic Unit Redemption (SUR) option. Recently, the Pension Fund Regulatory and Development Authority (PFRDA) has made several major changes to the NPS rules, giving investors more cash, more freedom, and better planning opportunities. If you haven't seen these changes yet, here are 10 major new NPS rules explained in simple, easy-to-understand Hindi.

10 Major New NPS Rules
1. You can now stay in NPS until the age of 85

Previously, the maximum age for remaining in NPS was 75 years. The government has now increased this to 85 years. This means you can invest your money in NPS until the age of 85.

2. Only 20% of the fund is now required for pension

This is a major relief for NPS investors. They are no longer required to invest 40 percent of their fund in an annuity. Now, employees can invest a minimum of 20% of their total fund in an annuity upon retirement. This directly means that you will have more cash in hand.

3. Option to withdraw the entire amount if the fund is up to Rs. 8 lakh

If the total amount in your NPS account is Rs. 8 lakh or less, you can withdraw the entire amount at once. If you do not wish to withdraw the entire amount, you will have these options:

Government employees will have the option to invest 40% of the fund in an annuity if they wish.
Private employees will have to invest at least 20% in an annuity if they do not withdraw the entire amount.

4. New method of withdrawing money in installments through SUR

NPS will now offer the Systematic Unit Redemption (SUR) option. This is exactly like the SWP in mutual funds. This facility is for investors whose total fund is between Rs. 8 and 12 lakh. Such investors can withdraw Rs. 6 lakh in a lump sum and receive the remaining amount in installments through SUR. The condition is that SUR must be taken for at least 6 years.

5. What are the options if the fund is between 8 and 12 lakhs?
Options for Government Employees

Withdraw ₹6 lakh in a lump sum and receive the remaining amount in installments over 6 years.
Withdraw ₹6 lakh in cash and buy a pension plan with the remaining amount.
Withdraw 60% of the total fund tax-free and buy an annuity with at least 40%.
Options for Private Employees

Withdraw ₹6 lakh in a lump sum and receive the remaining amount in installments over 6 years.
Withdraw ₹6 lakh in cash and buy a pension plan with the remaining amount.
You can withdraw 80% of the total fund in cash, and only 20% needs to be invested in an annuity.
6. More frequent withdrawals possible before age 60
NPS subscribers can now make a maximum of 4 partial withdrawals before the age of 60 or retirement. Previously, this limit was 3 times. Note that there must be a gap of at least 4 years between two withdrawals.

7. Withdrawal option even after 60
Those who continue in NPS even after the age of 60 can also withdraw money periodically. A gap of 3 years between two withdrawals will be necessary, and you can withdraw a maximum of 25% of your contribution.

8. Facility to withdraw the entire amount upon renouncing citizenship
If an NPS subscriber renounces Indian citizenship, they can withdraw their entire accumulated fund in a lump sum.

9. Immediate relief to the family in case of disappearance
If an NPS subscriber goes missing or is presumed dead, the nominee or legal heir will be given 20% of the total fund immediately. The remaining 80% will be given after the legal declaration of death.

10. Account name changed and loan facility
The term ‘Permanent Retirement Account’ will now be replaced with ‘Individual Pension Account’. In addition, the facility to take a loan from the bank by pledging the NPS account will now be available. The loan amount will depend on a portion of the total accumulated fund. With the loan facility, NPS has now become a liquid asset.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.