In certain terms, the government now enables for premature withdrawal from the NPS or National Pension System. Minister of State for Finance Shiv Pratap Shukla said in reply to a statement in Rajya Sabha on Tuesday that NPS subscribers are liable for three partial withdrawals from the pension system, with each withdrawal not exceeding 25 per cent of the contributions. The partial withdrawals from the NPS system will exclude the employer's contributions, the Minister added. Below listed are the 5 things that you must recognize about the NPS accounts.
1. With effect from August 10, 2017, the government allows partial withdrawal from the mandatory Tier-I account after 10 years from the date of opening.
2. However, there will be no restrictions on withdrawals for Tier-II account holders.
3. Under the National Pension System, the Government provides two types of accounts: Tier 1 and Tier 2. Tier I NPS account is a pension account, whereas Tier II is a savings account.
4. The minimum required period under NPS Tier 1 account for partial withdrawal has been reduced by the government, which means that the subscriber can initiate partial withdrawal in case of unexpected financial needs.
5. The Government has also eliminated the requirement to retain a minimum five-year gap between two partial withdrawals with effect from August 10, 2017. Which means that it is no longer required to maintain a gap of 5 years for the partial withdrawals up to 25 per cent from the NPS Tier-1 account.