NPS Exit and Withdrawal Rules Changed, Check New Rules Here

Hellobanker TeamDecember 26, 2025Last Updated: December 26, 2025

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NPS Exit and Withdrawal Rules Changed, Check New Rules Here

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The Pension Fund Regulatory and Development Authority (PFRDA) has notified changes in the exit and withdrawal rules of the National Pension System (NPS). These amendments are mainly aimed at the non-government sector, including the All Citizen Model and the Corporate Sector, and will apply uniformly to both the Common Schemes and the Multiple Scheme Framework. The changes also rationalise certain provisions for the government sector.

NPS Exit and Withdrawal Rules Changed Download

Sl.	Earlier stipulation	Revised stipulation
I. Non-Government Sector (All Citizen Model and Corporate Sector)
Changes applicable uniformly to Common Schemes (CS) & Multiple Scheme Framework (MSF)
	Lock-in period
1	All Citizen Model:Minimum lock-in period to be eligible for premature exit → 5 years	All Citizen Model (CS & MSF): Minimum lock-in period removed
	Normal Exit
2	All Citizen Model:Vesting period → Till 60 years of age to be eligible for normal exit	All Citizen Model (CS & MSF):Vesting period → 15 years or till 60 years of age (whichever is earlier).
3	Corporate Sector:Vesting period → Till age of retirement / superannuation	Corporate Sector (CS and MSF):Vesting period → Till age of retirement / superannuation (Remains same)

Sl.	Earlier stipulation	Revised stipulation
4	All Citizen Model & Corporate Sector:Up to 60% lumpsum;At least 40% annuity	All Citizen Model & Corporate Sector (CS & MSF): Up to 80% lumpsum;At least 20% annuity
5	All Citizen Model & Corporate Sector:For corpus ≤ ₹5 lakh → 100% lumpsum	All Citizen Model & Corporate Sector (CS & MSF):Corpus ≤ ₹8 lakh:100% lumpsum or SLW or SUR(or)Up to 80% lumpsum & At least 20% annuityCorpus > ₹8 lakh ≤ ₹12 lakh:Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity.(or)Up to 80% lumpsum & At least 20% annuityCorpus > ₹12 lakh:Up to 80% lumpsum & At least 20% annuity
	Premature Exit
6	All Citizen Model & Corporate Sector:Up to 20% lumpsum;At least 80% annuity	All Citizen Model & Corporate Sector (CS & MSF): Up to 20% lumpsum;At least 80% annuity (Remains same)
7	All Citizen Model & Corporate Sector:For corpus ≤ ₹2.5 lakh → 100% lumpsum	All Citizen Model & Corporate Sector (CS & MSF):Corpus ≤ ₹5 lakh:100% lumpsum or SLW or SUR(or)Up to 20% lumpsum & At least 80% annuityCorpus > ₹5 lakh:Up to 20% lumpsum & At least 80% annuity
	Exit due to Death
8	All Citizen Model & Corporate Sector:100% lumpsum; Option for annuity, if desired.	All Citizen Model & Corporate Sector (CS & MSF): 100% lumpsum; Option for annuity, if desired. (Remains same)Additionally, option for availing SLW or SUR.

Sl.	Earlier stipulation	Revised stipulation
II. Individuals joining NPS after age of 60 years (All Citizen Model)
	Normal Exit
9	Vesting period → 3 years to beeligible for normal exit	Vesting period removed
10	Up to 60% lumpsum;At least 40% annuity	Up to 80% lumpsum;At least 20% annuity
11	For corpus ≤ ₹5 lakh → 100% lumpsum	Corpus ≤ ₹12 lakh:100% lumpsum or SLW or SUR.(or)Up to 80% lumpsum & At least 20% annuityCorpus > ₹12 lakh:Up to 80% lumpsum & At least 20% annuity
	Premature Exit
12	Up to 20% lumpsum;At least 80% annuity	Not applicable as the vesting period has been removed
	Exit due to Death
13	100% lumpsum permitted; Option for annuity, if desired.	100% lumpsum permitted; Option for annuity, if desired. (Remains same)Additionally, option for availing SLW or SUR.
III. Government Sector
	Normal Exit
14	Up to 60% lumpsum;At least 40% annuity	Up to 60% lumpsum;At least 40% annuity; (Remains same)
15	For corpus ≤ ₹5 lakh → 100% lumpsum	Corpus ≤ ₹8 lakh:100% lumpsum or SLW or SUR(or)Up to 60% lumpsum & At least 40% annuityCorpus > ₹8 lakh ≤ ₹12 lakh:Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity.(or)Up to 60% lumpsum & At least 40% annuityCorpus > ₹12 lakh:Up to 60% lumpsum & At least 40% annuity

Sl.	Earlier stipulation	Revised stipulation
	Premature Exit
16	Up to 20% lumpsum;At least 80% annuity	Up to 20% lumpsum;At least 80% annuity; (Remains same)
17	For corpus ≤ ₹2.5 lakh → 100% lumpsum	Corpus ≤ ₹5 lakh:100% lumpsum or SLW or SUR(or)Up to 20% lumpsum & At least 80% annuityCorpus > ₹5 lakh:Up to 20% lumpsum & At least 80% annuity
	Exit due to Death
18	Up to 20% lumpsum;At least 80% annuity	Up to 20% lumpsum;At least 80% annuity; (Remains same)
19	For corpus ≤ ₹5 lakh → 100% lumpsum	Corpus ≤ ₹8 lakh:100% lumpsum or SLW or SUR(or)Up to 20% lumpsum & At least 80% annuityCorpus > ₹8 lakh ≤ ₹12 lakh:Up to ₹6 lakh as lumpsum and balance as SUR for min. 6 years or annuity.(or)Up to 20% lumpsum & At least 80% annuityCorpus > ₹12 lakh:Up to 20% lumpsum & At least 80% annuity
IV. Other changes
	Entry and Exit Age
20	Maximum entry age up to 70 years;exit age up to 75 years.	Entry and exit age increased to 85 years.
	Automatic continuation
21	Subscriber to intimate 15 days prior to 60 / superannuation for continuation (Govt) or deferment of annuity and/or lumpsum (Govt &Non-Govt).	15-day prior intimation requirement removed across sectors, hence subscribers can automatically continue under NPS.
	Specific Purpose Scheme
22	–	a) New regulation enabling exit/withdrawal provisions for‘specific purpose schemes’ under NPS.

Sl.	Earlier stipulation	Revised stipulation
		b) To be governed by Guidelines issued by the Authority foreach such scheme.
	Financial assistance against pension corpus
23	Assignment or pledge of NPS benefits void except where permitted by NPS Trust.	Subscriber can seek financial assistance from a regulated financial institution and the lender may mark lien or charge on the individual pension account up to 25% of subscriber’s own contribution (i.e. within partial withdrawal limits).To be governed by Guidelines issued by the Authority.
	Frequency of Partial Withdrawal
24	During the tenure of subscription (i.e. before exit) →Frequency: 3 times.Interval not stipulated between two withdrawals	Before 60 years age / superannuation (whichever is later):Frequency: 4 timesInterval: 4 years between two withdrawals Post 60 years age / superannuation (whichever is later):Frequency: NAInterval: 3 years between two withdrawals
	Purpose of Partial Withdrawal
25	Purchase or construction of a residential house permitted if subscriber does not already own ahouse (other than ancestral property).	No change, but additionally clarified it as a one-time withdrawal.
	Treatment of specified illness limited to a comprehensive list of specified critical illnesses (for subscriber /spouse / children / parents).	Broadened to medical treatment/hospitalization without a specified list (for subscriber/spouse/children/parents).
	Skill development, re-skilling, self-development activities (for subscriber).	Removed
	Establishing a start-up or ownventure (for subscriber).	Removed
	New purpose	New purpose added: Settlement of a financial obligation of the subscriber taken from a regulated financial institution againstlien/charge on NPS account.
V. NPS-Lite
	Normal Exit
26	Up to 60% lumpsum;	Up to 60% lumpsum;

Sl.	Earlier stipulation	Revised stipulation
	At least 40% annuity	At least 40% annuity; (Remains same)
27	For corpus ≤ ₹1 lakh → 100% lumpsum	Corpus ≤ ₹2 lakh:100% lumpsum (or)Up to 60% lumpsum & At least 40% annuityCorpus > ₹2 lakh:Up to 60% lumpsum & At least 40% annuity
	Premature Exit
28	Up to 20% lumpsum;At least 80% annuity	Up to 20% lumpsum;At least 80% annuity; (Remains same)
29	For corpus ≤ ₹1 lakh → 100% lumpsum	Corpus ≤ ₹2 lakh:100% lumpsum (or)Up to 20% lumpsum & At least 80% annuityCorpus > ₹2 lakh:Up to 20% lumpsum & At least 80% annuity
	Exit due to Death
30	100% lumpsum permitted; Option for annuity, if desired.	100% lumpsum permitted; Option for annuity, if desired. (Remains same)

Note 1:

Normal Exit → Exit upon,
1. Completing 15 years of subscription or 60 years of age (whichever is earlier) (All citizen model);
1. Superannuation / retirement (Government and Corporate Sector)
Vesting period → Period of subscription required to become eligible for Normal Exit
Premature Exit → Exit prior to completion of vesting period
Lock-in period → Period of subscription required to become eligible for Premature Exit
SLW → Systematic Lumpsum Withdrawal
SUR → Systematic Unit Withdrawal