I am in Defence. I will superannuate at the age of 57 yrs. Can I withdraw full amount from NPS Tier-1 account (invested 4.5 L till date) at the time of superannuation i.e., at 57 yrs or have to wait till 60 yrs?

Ans: • In NPS Tier 1 account you cannot withdraw the full amount on superannuation if the total corpus is more than Rs. 5 lakh. Here are the withdrawal rules for NPS Tier-1 account on superannuation.

• If the total corpus is less than or equal to Rs. 5 lakh: You can withdraw the entire amount as a lump sum.

• If the total corpus is more than Rs. 5 lakh: You can withdraw only 60% of the corpus as a lump sum. The remaining 40% has to be used to purchase an annuity plan that will provide you with monthly pension payments after retirement.

• In your case, since your corpus is Rs. 5.5 lakh, you will be able to withdraw only Rs. 3.3 lakh (60% of Rs. 5.5 lakh) as a lump sum. The remaining Rs. 2.2 lakh will have to be used to purchase an annuity plan.

Ans: When a Subscriber reaches the age of Superannuation/attaining 60 years of age, at least 40% of the accumulated pension
wealth of the Subscriber needs to be utilized for purchase of an Annuity providing for a regular pension to the Subscriber and the balance pension wealth is paid as lump sum to the Subscriber.
In case, the total corpus in the NPS account is less than or equal to Rs. 5 lakh, Subscriber can avail the option of complete (100%) Withdrawal.

Vipul Bhavsar
Chartered Accountant
www.capitalca.in

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,
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K. Ramalingam, MBA, CFP,
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Chief Financial Planner,
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www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment