NPS Withdrawal Rules for Government Employees

NPS Withdrawal Rules for Government Employees : As a government employee, it’s important to understand the rules and regulations surrounding the National Pension System (NPS) withdrawal. In this article, we will outline the withdrawal rules for government employees and provide useful latest information to help you make informed decisions about your NPS account.

Understanding the National Pension System (NPS)

The National Pension System is a voluntary retirement savings scheme introduced by the Government of India. It aims to provide pension benefits to individuals after their retirement. Government employees, including both central and state government employees, are eligible to participate in the NPS.

Types of NPS Withdrawals

  1. Premature Withdrawal: Government employees are allowed to make a premature withdrawal from their NPS account, subject to certain conditions. The maximum withdrawal amount is limited to 25% of the employee’s contributions. This withdrawal can only be made after completing a minimum of 10 years of service.
  2. Partial Withdrawal: Government employees can also make partial withdrawals from their NPS account for specific purposes like higher education, medical treatment, purchasing a house, or marriage of children. The maximum limit for such withdrawals is limited to 25% of the employee’s own contributions. However, only three partial withdrawals are permissible during the entire tenure of the NPS account.
  3. Exit upon Retirement: Upon retirement, government employees can withdraw a part of their NPS corpus as a lump sum, while the remaining amount must be used to purchase an annuity for a regular pension. The lump sum withdrawal can be a maximum of 60% of the employee’s contributions.

Tax Implications

Withdrawals from the NPS are subject to tax implications. While the partial withdrawal and lump sum withdrawal are partially taxable, the annuity received after retirement is considered as regular money income and is taxable as per the individual’s income tax slab rate.

Procedure for Withdrawing from NPS

To initiate a withdrawal from your NPS account as a government employee, follow these steps:

  1. Submission of Withdrawal Form: Obtain and fill out the necessary withdrawal form from your respective NPS nodal office or online portal.
  2. Attach Required Documents: Along with the withdrawal form, submit the required documents such as identity proof, address proof, and bank account details for the transfer of funds.
  3. Verification Process: The nodal office will verify the withdrawal request and documents provided.
  4. Processing and Disbursement: Upon successful verification, the withdrawal request will be processed, and the funds will be disbursed to the employee’s registered bank account.


Understanding the NPS withdrawal rules is crucial for government employees to effectively plan their retirement. By being aware of the various types of withdrawals, tax implications, and the withdrawal process, you can make informed decisions regarding your NPS account. Remember to consult with your financial advisor or the NPS nodal office for personalized guidance on your specific situation.

Disclaimer: This article is for informational purposes only and should not be considered as financial or legal advice. Please consult with a professional advisor before making any financial decisions.

Updated: October 30, 2023 — 2:03 am

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