The government has relaxed partial withdrawal norms for NPS subscribers. With this, NPS subscribers can withdraw up to 25% of their money from their corpus thrice in their lifetime.
The first withdrawal is now permissible after three years from the date of joining. Earlier, NPS subscribers were allowed to withdraw their corpus after completion of 10 years.
This amount will be tax free in the hands of subscribers.
In addition, PFRDA has done away with the requirement of maintaining a gap of at least five years between the partial withdrawals. NPS subscribers can withdraw their accumulated corpus anytime.
Currently, NPS subscribers can withdraw partially for higher education or marriage of their children, fund their entrepreneurial dream or professional skill development, construction or purchase of first house and treatment of specific ailments like cancer, kidney failure, paralysis etc.
Like NPS, EPFO also allows partial withdrawals. However, since there is no such limit on withdrawals, many people pull out their money from their EPFO account. As a result, many subscribers are left with a small corpus for their post-retirement days defeating the very purpose of EPFO.
Another key development is choice of pension fund for central government employees. Now, such employees can choose pension funds including private sector pension funds, with the change of fund being allowed once every year.