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Can I Close Nps Tier 1 Account?

Can I Close Nps Tier 1 Account

If you do not wish to continue your NPS account or defer your Withdrawal, you can exit from NPS anytime. Log in to CRA system (www.cra-nsdl.com) using your User ID (PRAN) and Password. Click on “Exit from NPS” menu and click on “Initiate Withdrawal request” option Enter necessary details including choice of Annuity Service Provider (ASP) and Annuity Scheme which will provide you pension. Once the details are submitted, you need to print the system generated Withdrawal Form, paste photograph, sign across photograph and against the declaration and submit the form along with KYC documents to respective Nodal Office, in case of Government sector and from Point of Presence (POP), in case of All Citizens of India & Corporate sector. The Nodal Office will verify the form along with the attached documents and authorized the withdrawal request online in CRA. If you are not able to raise withdrawal request online, you can fill up the physical Withdrawal Form and submit it to the respective Nodal Office/POP who will initiate the online withdrawal request on your behalf. You can download Withdrawal Form from Forms section under respective sector on this website.

Please ensure that your updated details (such as PAN, address, contact details, Bank details, nomination details etc.) are registered in your NPS account before initiating withdrawal. If you wish to update any registered details, please update online by accessing CRA system or submit Form S2 to your associated Nodal Office/POP.

  1. You can download Form S2 from Forms section under respective sector on this website.
  2. The complete information about ASPs, their contact details, annuity calculator for annuity quotes etc.
  3. Is available on CRA website at: https://npscra.nsdl.co.in/nps-exit-option.php Subscribers registered on or after July 1, 2014 are mandatorily required to submit FATCA Self–certification.

For more information on FATCA self-certification, click on https://npscra.nsdl.co.in/FATCA-Self-Declaration.php.

How do I exit NPS Tier 1?

In order to ensure timely exit/withdrawal from NPS, CRA sends communication to the subscriber & Nodal office 6 month before the date of superannuation/attainment of 60 years to initiate the withdrawal claim in the CRA system and generates a Claim ID for each claim request.

By subscriber using User ID & IPIN: The subscriber can directly initiate withdrawal application using his/her User ID & IPIN in the CRA system with in a period of 6 months before the age of superannuation/vesting date opted by subscriber. While initiating the request in the system, the subscriber needs to provide details such as lump sum % of withdrawal, annuity % share details, Annuity Service Provider details, Bank details, Nomination details etc. By Nodal Office/POP/Aggregator: In case subscriber is not able to initiate the request directly into the system, the withdrawal application can be initiated by the concerned Nodal Office/ POP or Aggregator in the CRA system using their respective logins. The subscriber is required to provide the physical withdrawal form along with the supporting documents such as Identity & Address Proof, Bank details etc. to the Nodal Office. The death claims shall directly be initiated by Nodal Office/POP/Aggregators through their respective logins in CRA system. The Nodal Office shall verify whether the Withdrawal Request Form has been properly filled and check whether all KYC documents have been submitted by the subscriber/claimant. The Nodal Office will initiate and authorise the request only after such verification is carried out. Post authorisation of the request in CRA system, the Nodal Office/POP/Aggregator shall forward the withdrawal application form and supporting documents received from subscriber to CRA.

The detailed procedure of generating of Claim ID and capturing the withdrawal request in CRA system is provided under Annexure I of the Circular,

Can I withdraw money from NPS Tier 1 before maturity?

How can I Partially withdrawal from my Tier I account – A subscriber can make partial withdrawal after joining the NPS after 10 years, not exceeding twenty-five per cent of the contributions made by him/her and excluding contribution made by employer, if any, at any time before exit from National Pension System subject to the terms and conditions, purpose, frequency and limits specified under Regulations 8 of PFRDA (Exits & Withdrawals under the NPS), Regulations, 2015.

When can I exit from NPS Tier 1?

NPS Exit

A. NPS Exit Reference Table
Category Premature Exit / Voluntary Retirement (Exit before 60 years/Superannuation) Normal exit (60 years or beyond /Superannuation ) Unfortunate Death before normal exit / 60 years or Superannuation
Government Sector
  1. Complete (100%) Lump sum withdrawal allowed if the corpus is equal to or below ₹ 2.5 Lakh.
  2. If the corpus higher than ₹ 2.5 Lakh, at least 80% of the accumulated pension wealth has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber and the balance 20% is paid as lump sum to the Subscriber.
  3. Subscribers can opt and encouraged to continue in NPS under All Citizens Model post carrying out Inter Sector Shifting (ISS).
  1. Complete (100%) Lump sum withdrawal allowed if the corpus is equal to or below ₹ 5 Lakh.
  2. If the corpus is more than ₹ 5 Lakh, at least 40% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity providing for monthly pension to the Subscriber and the balance 60% is paid as lump sum to the Subscriber.
  3. In case of death after 60 years / superannuation) 60% lump sum will be paid to the nominees and 40% for default annuity by dependents.
  1. Complete (100%) withdrawal for corpus to nominees/legal heirs if the corpus is less than or equal to ₹ 5 Lakh. However, the nominees can opt for annuity if desired.
  2. If the corpus is higher than ₹ 5 Lakh, at least 80% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of default Annuity by dependents and the balance 20% is paid as lump sum to the nominee/legal heir.
  3. If none of the dependent family members (spouse, mother & father) are alive, the Corpus i.e.80 % has to be returned to the surviving children of the Subscriber and in the absence of children, to the legal heirs.
Non – Government Sector
  1. 5 Years mandatory subscription.
  2. Complete (100%) Lump sum withdrawal if the corpus is equal or less than ₹ 2.5 Lakh.
  3. If the corpus more than ₹ 2.5 Lakh, at least 80% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity and the balance 20% is paid as lump sum to the Subscriber.
  1. Complete (100%) Lump sum withdrawal is allowed if the corpus is less than or equal to ₹ 5 Lakh.
  2. If the corpus is more than ₹ 5 Lakh, at least 40% of the accumulated pension wealth of the Subscriber has to be utilized for purchase of an Annuity and the balance 60% is paid as lump sum.
  3. In case of death after 60 years / superannuation, lump sum is paid to the nominees. However, the nominees can opt for annuity if they desire so.

The entire accumulated pension wealth of the Subscriber payable to the nominee or legal heirs if the Subscriber dies before or after attaining 60 years. However, the nominees can opt for annuity if they desire so.

Unfortunate death of NPS Subscriber post payment of the lump sum but annuity not issued.
  1. Default annuity is to be bought by the dependents in the case of Govt sector. If none of the dependent family members (spouse, mother & father) are alive, the Corpus has to be returned to the surviving children of the Subscriber and in the absence of children, to the legal heirs.
  2. For Non-Govt sector, annuity as per the choice is to be availed by spouse/dependents. Complete (100%) lump sum withdrawal or annuity or lump sum withdrawal & annuity as per the choice is to be availed by spouse/dependents.
Subscribers who join NPS after 60 years In case of Non Govt Sector

  1. Normal exit is allowed after completion of 3 years. The Subscriber will be required to utilize at least 40% of the corpus for purchase of annuity and the remaining amount can be withdrawn in lump sum. Complete (100%) withdrawal allowed as lump sum if the corpus is less than or equal to ₹ 5 Lakh.
  2. In case of exit before completion of 3 years, the Subscriber will have to utilize at-least 80% of the corpus for purchase of annuity and the remaining corpus can be withdrawn in lump sum. Complete (100%) withdrawal allowed as lump sum if the corpus is less than or equal to ₹ 2.5 Lakh.
  3. In case of unfortunate death of the Subscriber, the entire corpus will be paid to the nominee of the Subscriber as lump sum or nominee can opt for annuity.

In case of Govt Sector

In case of Govt Sector, the exit rules will be applicable as per the terms and condition of the employment.

Note : Default Annuity Scheme shall provide for Annuity for life of the Subscriber and his or her spouse (if any) with provision for return of purchase price of the Annuity and upon the demise of such Subscriber and spouse (if any), the Annuity be re-issued to the family members in the order specified here under at a premium rate prevalent at the time of purchase of such annuity by utilizing the purchase price required to be returned under the Annuity contract and all the family members in the order specified below are covered,

  1. Living dependent mother of the deceased Subscriber;
  2. Living dependent father of the deceased Subscriber

After the coverage of all the family members specified above, the purchase price shall be returned to the surviving children of the Subscriber and in the absence of children, the legal heirs of the Subscriber, as may be applicable.

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B. Exit & withdrawal due to disability and in-capacitation Government sector Subscribers If the employer certifies that the Subscriber has been discharged from the services of the concerned office on account of invalidation or disability, in such case, exit shall be handled as superannuation. Non – Govt. sector Subscribers lf Subscriber is physically incapacitated or has suffered a bodily disability leading to his incapability to continue NPS subject to the Subscriber submitting a disability certificate from a Government surgeon or Doctor (treating such disability or invalidation of Subscriber) stating the nature and extent of disability and also certifying that:

  1. the affected Subscriber shall not be in a position to perform his regular duties and there is a real possibility of the affected Subscriber, being not able to work for the remaining period of his life.; and
  2. Percentage of disability is more than 75 % in the opinion of such Government surgeon or doctor (treating such disability or invalidation of Subscriber).”

It means such cases shall be handled similarly as exit cases at the age of superannuation or at the age of 60 years.

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C. Option of Family Pension for Government sector Subscribers provided by the employer If the Subscriber or the family members of the deceased Subscriber, upon his death, avails the option of additional relief on death or disability provided by the Government, the Subscriber has to transfer NPS corpus to the Nodal Office. The Subscriber or family members of the Subscriber availing such benefit shall specifically and unconditionally agree and undertake to transfer the entire accumulated pension wealth to the Government.

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D. Deferment/Continuation under NPS Category Continuation of NPS account Deferment of Withdrawal Non-Govt. Sector
  1. Subscriber can opt to continue in NPS till 75 years of age and also deposit contributions to avail exclusive tax benefits.
  2. All the facilities and options of normal NPS account like access to CRA system, option to switch fund managers and assets class etc. provided.
  3. If Subscriber after attaining the age of 60 years/Superannuation has not initiated exit request or has not exercised the option of continuation under NPS, then Subscriber shall be automatically continued under NPS till he/she attains the age of 75 years, as if he/she has exercised the option of Continuation. In case of Corporate Subscribers, the Subscriber shall be automatically continued under NPS till he/she attains the age of 75 years, after 90 days of superannuation.
  4. Subscribers can exit from NPS and start pension anytime during the period of continuation.
  1. Subscriber can defer his withdrawal with multiple options
    • Defer only Lump sum withdrawal
    • Defer only Annuity
    • Defer both
  2. Subscriber can opt to defer the lump sum up to the 10 years.
  3. Annuity can be deferred for 3 years.
Govt. Sector
  1. Subscriber can opt to continue in NPS till 75 years of age and also deposit contributions to avail exclusive tax benefits.
  2. All the facilities and options of normal NPS account like access to CRA system, option to switch fund managers and assets class etc. provided.
  3. Subscribers can exit from NPS and start pension anytime during the period of continuation.
  1. Subscriber can defer his withdrawal with multiple options
    • Defer only Lump sum withdrawal
    • Defer only Annuity
    • Defer both
  2. Subscriber can opt to defer the lump sum up to the 10 years.
  3. Annuity can be deferred for 3 years.
Note :

  1. If the Subscriber has opted for deferment, Subscriber will not be able to contribute. However, if Subscriber has opted for continuation, he/she will be able to contribute in NPS.
  2. CRA Account maintenance charges need to be borne by the Subscribers post deferment/continuation, if the charges were borne by the employer earlier.

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E. Allocation of corpus among lump sum & annuity at the time of exit Types of Exit Criteria for calculation of Lump sum/Annuity Premature Exit / Voluntary Retirement / Normal Exit (60 years/Superannuation) The corpus in the PRAN as on the date of initiation of withdrawal request shall be criteria for allocating the same for the lump sum or annuity and both as the case may be. Death The corpus lie in PRAN as on the date of death shall be criteria for allocating the same among the lump sum or annuity and both as the case may be. Additional Information

  • The percentage of the corpus mentioned in the table for buying annuity is minimum whereas for the lump sum is maximum. It means the entire corpus can be used for buying annuity whereas the lump sum component has the maximum cap as the case may be.
  • Subscriber can buy Annuity from any one of the empanelled Annuity Service Providers (ASPs) by PFRDA. The list of ASPs empanelled and their contact details are available at
  • Subscriber can check the Annuity rates (pension amount) offered by different ASPs from the Annuity Calculator available on

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F. Option for NPS Subscribers who have partially exited from NPS The eligible NPS Subscribers who have withdrawn lump sum from NPS but annuity not issued can exit from NPS by availing Annuity or redeposit the amount withdrawn as lump sum and continue the same PRAN.

NPS Exit

Can I withdraw full amount from NPS Tier 1?

Yes, a subscriber can claim withdrawal in following cases: In case of Superannuation- A Subscriber can claim 100% Withdrawal if the total accumulated corpus is less than or equal to Rs.5 lakh at the time of Superannuation/attaining age of 60 years.

Can NPS account be deactivated?

A subscriber must make a minimum yearly payment of Rs.6000 to his Tier I account; otherwise, the account would be locked. Here is how you can reactivate or unfreeze an NPS account in such a case. – Can I Close Nps Tier 1 Account Getty Images Individuals can open pension accounts online under NPS by selecting Aadhaar based, or by providing PAN, KYC based details. A subscriber must pay a minimum initial contribution of Rs.500 for Tier I and Rs.1000 for Tier II at the time of registration, followed by a yearly contribution based on the account to keep the account active.

However, there can be instances when your NPS account will be frozen due to non-contribution of amount. Here is how you can reactivate or unfreeze an NPS account in such a case. How to reactivate, unfreeze the account NPS account due to non-payment Offline method In a fiscal year, a subscriber must make a minimum yearly payment of Rs.6000 to his Tier I account; otherwise, the account would be locked.

To unfreeze the account, the customer must pay the total of the minimum contributions made during the freeze period, the minimum contribution for the year in which the account is reactivated, and a penalty of Rs.100. To unfreeze an account, the subscriber must go to the Point of Presence (POP) and pay the necessary fees.

In the Annexure UOS-S10-A form, which is the required form for unfreezing PRAN, check the boxes labelled “Tier I,” “Tier II,” and “Both (Tier I and Tier II)” accounts. Online method For eNPS accounts, contributions can be made online. When a minimum payment of Rs 500 is made within a fiscal year, the NPS will be unfrozen.

You can contribute to unfreeze the account using any POP-SP (point of purchase service provider) or online through eNPS. On the E-NPS Portal homepage, click “Contribution.” You can make a contribution on the following page after providing your Permanent Retirement Account Number (PRAN) and birthdate. Penalty The penalty of Rs.100 is applicable to unfreeze Tier 1/Tier 2 or both accounts. Swavalamban subscribers will have to pay a Rs.25 penalty. The deposit amount required to unfreeze the account is listed below: For regular accounts: Rs.500/- for the current fiscal year plus a penalty of Rs.100/- for the year(s) of freezing.

If the contribution amount is less than the minimum expected amount, the CRA system will reject the contribution during the upload process. Withdrawal of NPS when PRAN is in frozen or inactive state According to the NPS FAQ page, ” The withdrawal will be processed like a normal withdrawal but in addition deduct the penalty that is applicable for unfreezing of such an account without seeking to reactivate the account by the subscriber or payment of amounts necessary to activate the account.

In essence, the CRA will unfreeze the account by charging the penalty applicable and process the withdrawal claim.” (Your legal guide on estate planning, inheritance, will and more.) Download The Economic Times News App to get Daily Market Updates & Live Business News.

How do I withdraw from my Tier 1 account?

Bank passbook, cancelled cheque, bank’s letterhead, bank certificate with proof of account holder name, number and IFSC code. If eligible for complete withdrawal, then one also needs to submit an undertaking cum request form. KYC documents. Original PAN card.

What is the minimum time in NPS?

The minimum lock-in period is 3 years for NPS. After completion of which you can withdraw from NPS in the following circumstances/conditions:

Partial Withdrawal – after completion of 3 years subscriber can withdraw 25% of his/her own contributions for specific reasons viz illness, disability, education or marriage of children, purchasing property, starting a new venture. A subscriber can partially withdraw up to a maximum of 3 times during his/her entire tenure in NPS. Premature Withdrawal – after completion of 5 years, the subscriber can withdraw maximum 20% of the corpus as lumpsum and minimum 80% of the corpus has to be utilized for purchasing an annuity plan for receiving the pension. If the accumulated corpus is less than ₹2.5 lakh, the entire corpus is paid as lumpsum to the subscriber. Normal Withdrawal – on completion of 60 years of age (if subscriber has joined NPS before 60 years of age), the subscriber can withdraw maximum 60% of the corpus as lumpsum and minimum 40% of the corpus has to be utilized for purchasing an annuity plan for receiving the pension. If the accumulated corpus is less than ₹5 lakhs, the entire corpus is paid as lumpsum to the subscriber

In case of the unfortunate event of death of a subscriber, the nominee/legal heir can withdraw the entire accumulated corpus. The nominee / family members of the deceased subscriber can also purchase annuity, if they so desire.

What is the lock-in period for NPS Tier 1 and Tier 2?

NPS Tier 1 Vs Tier 2 – What is the Difference? – Following are the key difference between NPS Tier 1 and Tier 2 accounts:

Basis of Difference NPS Tier 1 NPS Tier 2
Eligibility Any Indian citizen between the ages of 18 and 65 years may open a Tier 1 account. You will be assigned a Permanent Retirement Account Number (PRAN), To open an NPS Tier 2 account, you must be a Tier 1 member.
Lock-in period NPS Tier 1 has a lock-in period till the subscriber is 60 years old. Tier 2 accounts have no lock-in period. Thus you can withdraw funds at any time.
Minimum number of contributions per year 1 None, you can choose not to make any investment in a year
Account opening contribution INR 500 INR 1,000
Minimum subsequent contribution INR 1,000 INR 250
Tax Benefits on the contribution NPS Tier 1 account investments up to INR 1,50,000 per financial year qualify for tax deduction under Section 80C of the Income Tax Act, 1961. Furthermore, an additional contribution of up to INR 50,000 also qualifies for tax deduction under Section 80CCD (1B) of the Income Tax Act, 1961. No tax benefit is available for contributions made to NPS Tier 2 account.
Tax on withdrawals On maturity, the entire pension fund amount is tax-exempt. The amount is added to your taxable income and taxed per your slab rates.
Limit on withdrawals You can withdraw 60% of the corpus on retirement and use the remaining 40% to purchase an annuity plan. You can withdraw the entire corpus of NPS Tier 2 accounts. Furthermore, it can be as a lump sum or in multiple transactions without any restriction.
Transfer of Funds Tier 2 funds may be transferred to Tier 1 accounts. Additionally, current EPF funds can also be transferred to Tier 1. NPS Tier 2 account doesn’t allow any fund transfers.
Fund Management ChargesSame for both Tier 1 and Tier 2 Accounts Asset ClassesThe asset classes across which the investments can be made are the same for both NPS Tier 1 and 2 accounts. Following are the asset classes: Equity (E): The scheme primarily invests in equity market securities. Corporate Debt (C): The scheme invests in bonds issued by public sector entities, public financial institutions, infrastructure companies, and also money market instruments, Government Securities (G): The scheme invests in government securities, state government securities, and also money market instruments. Alternative Investment Funds (A): This asset class invests in instruments such as CMBS, REITS, and AIFs.

What is the difference between PPF and NPS?

National Pension System(NPS) is a market-linked pension savings vehicle set up by the Government of India. Like mutual funds, the returns of the NPS depend on the performance of pension fund managers and the market. PPF or Public Provident Fund is a government-backed savings vehicle with fixed returns, set by the Government every quarter. Can I Close Nps Tier 1 Account

Criterion PPF NPS
Safety High Low
Returns Moderate High*
Liquidity Low Low
Taxation Fully exempt Low**

High return potential due to long holding period, if the portfolio has sufficient equity allocation. **40% of NPS is tax-free so the overall rate on NPS is low. Also Read How to Open NPS Account Online

What happens if I exit my NPS account?

You will continue to enjoy all the facilities and options of normal NPS account like access to CRA system, option to switch fund managers and assets class etc. during the continuation period.

Why my NPS is deactivated?

This can be because the KYC documents have not been uploaded by the PoP in the NPS portal. For such a case, one must approach the PoP and seek help clarifying the reason for such a freeze. After understanding the reason, take the required steps to unfreeze this account.

Can I close NPS Tier 2 account?

How to close an NPS Tier 2 account – You can submit a request to close your NPS Tier 2 account by logging into your NPS account online through enps.nsdl.org. Alternatively you can close your NPS Tier 2 account by submitting an account closure form to your nearest NPS Point-of-Presence, typically your bank.