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Investors India
|January 2026
PFRDA allows NPS subscribers to withdraw upto 80% of pension corpus
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Non-government NPS subscribers can now withdraw up to 80% of their pension corpus upon superannuation or exit. Earlier, they were allowed to withdraw only 60%, with the remaining 40% mandatorily used for annuity purchase. This change follows amendments notified by the Pension Fund Regulatory and Development Authority (PFRDA).
However, there is no clarity on taxation of the additional 20% retirement corpus.
With this, only 20% of the corpus must be used to purchase an annuity, while the remaining 80% can be withdrawn either as a lump sum or through periodic payouts. The PFRDA said the move is aimed at providing subscribers with greater flexibility at retirement.
If the total pension corpus is Rs.8 lakh or less, subscribers can withdraw 100% of the amount. For a corpus between Rs.8 lakh and Rs.12 lakh, subscribers can withdraw up to Rs.6 lakh, with the remaining balance used for annuity purchase or periodic payouts. If the corpus exceeds Rs.12 lakh, the 80% withdrawal rule will apply.
This story is from the January 2026 edition of Investors India.
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