Government Services · India · Pension (NPS)

NPS Withdrawal Rules: Partial, Premature and at 60 (2026)

Updated for 2026 · Claw Editorial

The National Pension System (NPS) is a retirement account regulated by the PFRDA, and because it is meant to pay you a pension in old age, the rules on taking money out are built to keep most of it invested until you turn 60. There are three situations: a partial withdrawal while you keep contributing, a premature (early) exit before 60, and the normal exit at 60 or superannuation. In each case the split between how much you can take as a lump sum and how much must buy an annuity is different. This page explains all three for the Tier I retirement account, the purposes and limits for a partial withdrawal, the small-corpus relief that lets you take everything in cash, the forms and the role of the central recordkeeping agency, and the grievance and dispute route if an exit or an annuity claim is wrongly rejected. The percentages depend on the current PFRDA rules, so they carry a confirm note. Last verified October 2026.

01Tier I and Tier II

NPS has two accounts, and the withdrawal rules apply mainly to the first:

• Tier I is the retirement account. It has the tax benefits and the withdrawal restrictions described below.
• Tier II is a voluntary, flexible savings account that you can open only if you have a Tier I. It has no exit restriction, so you can withdraw from it freely, but it does not carry the same tax relief.

Everything below is about the Tier I account, which is where the rules matter.

02Partial withdrawal while working

You can take a partial withdrawal from your Tier I account without exiting, if you meet the conditions:

• You must have been in NPS for a minimum number of years.
• The amount is capped at a share of your own contributions, not the employer contributions or the returns.
• It is allowed only for specified purposes, such as higher education or marriage of children, buying or building a first house, treatment of serious illness, or starting a venture or skill development.
• Only a limited number of partial withdrawals are allowed over the life of the account.

A partial withdrawal does not close the account; you keep contributing.

03Premature exit before 60

If you want to exit NPS before the age of 60 or superannuation, the rule is weighted heavily towards the annuity:

• A larger part of the corpus must be used to buy an annuity, and only a smaller part can be taken as a lump sum.
• There is a small-corpus relief: if the total corpus is at or below a threshold, you can withdraw the whole amount as a lump sum without buying an annuity.
• A minimum period of membership is usually required before a premature exit is allowed.

The annuity is bought from an annuity service provider that pays you a monthly pension for life, in the option you choose.

04Exit at 60 or superannuation

At the normal exit, at 60 or on superannuation, the split is more generous:

• You can take a part as a tax-free lump sum, and the rest must buy an annuity.
• Small-corpus relief: if the corpus is at or below a threshold, you can take the whole amount as a lump sum without an annuity.
• You can also defer the lump sum or the annuity purchase, or keep contributing, up to the maximum age the rules allow.

05How to apply for the withdrawal

Exits and withdrawals are processed through the Central Recordkeeping Agency (CRA) and your point of presence (usually your bank or employer):

• Log in to the CRA portal with your Permanent Retirement Account Number (PRAN) and raise the withdrawal or exit request online.
• Complete the e-signature or OTP based verification, and upload the documents the request needs (identity, bank proof, and the annuity choice where one applies).
• For an annuity, pick the annuity service provider and the annuity option; the CRA passes the annuity corpus to that provider.
• Your point of presence or nodal office authorises the request, and the lump sum is credited to your verified bank account.

06If an exit or annuity claim is rejected: the dispute route

Most NPS exits go through smoothly, but a request can be stuck or rejected: a KYC or bank mismatch holds up the lump sum, the annuity provider delays issuing the policy, or a nodal office does not authorise a valid exit. The first step is the grievance system. Raise a complaint through the CRA grievance module (the Central Grievance Management System) and, if it is not resolved, escalate within the NPS Trust and then to the PFRDA, which is the regulator. If the grievance route fails and you have a money claim, a deficiency in service can be taken to a consumer commission, or a civil court where a legal right is in issue. To understand the consumer route, see how to file a consumer complaint.

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

If a rejected NPS exit or a stuck annuity claim turns into a consumer complaint or a civil case, you can create a FREE Claw account and track that matter across the forum that hears it. Claw covers 9,102 courts, benches and forums in India, including the consumer commissions, so there is a real tracking home for the orders and next dates. Judgment search spans 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, and results return in under 5 seconds, which helps you or your lawyer see how similar pension and deficiency-in-service disputes were decided. Claw does not train its AI models on your documents. This is general information and not legal advice, and a contested claim still needs a lawyer for the arguments.

To see what is already filed in a forum, you can run a case search across Indian courts by party name.

07Sources and further reading

• PFRDA: pfrda.org.in
• NPS CRA (Protean): npscra.nsdl.co.in
• eCourts (case status): ecourts.gov.in
• Claw: clawlaw.in

This page is general information for readers in India, not legal advice. NPS percentages and thresholds come from the PFRDA exit regulations and can change, so confirm the current figures on the official site before you plan a withdrawal.

08Frequently asked questions