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I'm 60, retired and my superannuation transferred to NPS. Can I still withdraw 60%?

Ramalingam

Ramalingam Kalirajan  |8735 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 07, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
atul Question by atul on Apr 06, 2025Hindi
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I was a contributor to superannuation scheme (from LIC) of my company for many years. Last year the company gave option to transfer the collected funds to NPS. I opted for the same and the transfer has been done. But I retired (60 yrs) before the transfer could be completed. The money has been in NPS for 2 months. Can I withdraw 60% as lumpsum from NPS now?

Ans: Your NPS Transfer from Superannuation: Key Points
You contributed to a Superannuation Scheme for many years through your company.

Last year, the company allowed one-time transfer of this corpus to NPS.

You opted in. But you retired before the transfer was processed.

Now, the superannuation money has landed in NPS, just 2 months ago.

You are now over 60 years and want to withdraw 60% lumpsum from NPS.

Basic Withdrawal Rule at Age 60 in NPS
Once you turn 60 years, you are allowed to withdraw up to 60% as lumpsum.

The remaining 40% must be used to buy annuity from an IRDA-approved insurer.

The withdrawal request must be made through CRA (Central Recordkeeping Agency) portal.

This withdrawal can be done even if contributions are only for a short period, like in your case.

Unique Situation in Your Case: Transfer After Retirement
Let’s examine a few things that make your case unique.

You had already retired before the NPS transfer was completed.

But the transfer itself was valid, and now the money is with NPS.

You are now a subscriber above 60 years with corpus already in Tier-I account.

This means you can initiate withdrawal as per NPS exit rules.

PFRDA Rules Allow This Withdrawal
As per the PFRDA guidelines, the following conditions apply:

Subscribers aged 60 or more can initiate exit anytime after retirement.

Minimum NPS contribution duration not mandatory for corporate-to-NPS transfers.

Since the transferred corpus is now inside NPS, you are treated as a retired subscriber.

You are eligible to withdraw 60% tax-free, and use 40% for annuity purchase.

Steps to Initiate Withdrawal from NPS
You can now begin the formal withdrawal process:

Login to https://cra-nsdl.com or https://enps.nsdl.com using PRAN.

Choose the “Exit from NPS” option.

Provide bank details, identity proof, and annuity option details.

Upload a cancelled cheque and photograph.

If help is needed, contact your PoP (Point of Presence) or nodal office.

You can also go through your former employer if they facilitated the NPS setup.

Tax Benefit on Withdrawal
The 60% you withdraw as lumpsum is completely tax-free.

The remaining 40%, when used to buy annuity, will be taxable as pension income.

The monthly pension received from annuity is added to your taxable income every year.

Caution on Annuity Choice
Choose annuity type wisely. Options include return of purchase price, joint annuity, etc.

Avoid choosing lowest premium. Focus on steady and safe pension.

You may compare annuity options on https://www.npstrust.org.in/annuity-service-providers.

Finally
Yes, you can withdraw 60% lumpsum from NPS even if it was a superannuation transfer.

Retirement before transfer is not a disqualification. The key is, money is now in NPS.

Follow the exit process and choose your annuity option with care.

Since this is a one-time decision, you may take help from a Certified Financial Planner.

Best Regards,
?
K. Ramalingam, MBA, CFP,
?
Chief Financial Planner,
?
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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