National Pension Scheme: How To Make Partial Withdrawal From NPS? A Step-By-Step Guide

The National Pension System (NPS) is a popular retirement tool in India, particularly attractive due to its market-linked nature. It is a voluntary contribution scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013.

While people can have different goals for their post-retirement financial journey, many experts recommend following the ‘25x’ rule. This suggests accumulating savings that are 25 times your annual expenses before retirement. The formula ensures that one has sufficient funds to be able to live a peaceful and happy life. 

However, life can sometimes throw unexpected events your way, which can force you to access your retirement savings earlier than planned. That's why the NPS allows for partial withdrawals, which gives investors flexibility and control over money.

While NPS is a long-term investment tool and comes with a strict lock-in period. PFRDA allows account holders to make partial withdrawals in certain situations.

NPS accounts are classified into two broad categories - Tier I and Tier II. While NPS Tier I is well-suited for retirement planning, Tier II NPS accounts act as a voluntary savings account. Tier I NPS investment is a long-term one and the amount cannot be withdrawn until retirement. This is not the case with Tier II NPS accounts.

Here are the steps for making a partial withdrawal from an NPS account.

• Go to the official website of NSDL CRA.

• In the User ID section, enter the Permanent Retirement Account Number (PRAN).

• Mark the checkbox and enter the password and captcha.

• Click on “Submit”.

• Click on “Initiate Withdrawal Request” and select “Partial Withdrawal from Tier 1” option.

• Enter the required information and the percentage of funds you want to withdraw along with the reason for withdrawal.

• Click on “Submit”.

• Take a printout of the form and put your photograph on it.

• Submit the form along with all necessary documents to a Point of Presence (PoP) service provider for the withdrawal.

• Download Form 601 from the Protean NSDL portal for partial withdrawal.

• Fill up the form with the required information.

• Submit this form with all required documents to a PoP service provider to start the withdrawal process.

The Tier-2 withdrawals can only be done offline. Here are the steps you need to follow:

1. Download the UOS-S12 form from the Protean NSDL portal.

2. Take a printout of the form, fill it up, and submit it with the required documents to the PoP service provider.

3. The PoP service provider will verify all the details and will likely do the disbursal in 3 days.