NPS exit rules at 60 (non-government subscribers)
PFRDA amended the exit regulations in December 2025. For the All Citizen and Corporate models:
| Corpus at exit | Lump sum | Annuity / payouts |
|---|---|---|
| Up to ₹8 lakh | Up to 100% | Not compulsory |
| ₹8 lakh – ₹12 lakh | Up to ₹6 lakh | Rest over ≥ 6 years (SUR) or annuity |
| Above ₹12 lakh | Up to 80% | At least 20% buys an annuity |
Normal exit is at 60 or after 15 years in NPS, whichever comes first; you can also stay invested up to 85. Government employees still need to annuitise at least 40%.
Tax at exit
The Income-tax law still exempts only 60% of the corpus as a lump sum. If you take 80%, the extra 20% is added to your income for the year. The annuity purchase itself is not taxed, but the pension you receive is taxed at your slab rate.
Tax benefits while you save
| Deduction | New regime | Old regime |
|---|---|---|
| Employer contribution — 80CCD(2) | Up to 14% of basic + DA | Up to 10% of basic + DA (14% for government) |
| Your own contribution — 80CCD(1) within 80C | Not available | Up to ₹1.5 lakh (shared with 80C) |
| Extra own contribution — 80CCD(1B) | Not available | Up to ₹50,000 |
Employer contributions to NPS, EPF and superannuation together are tax-free only up to ₹7.5 lakh a year. The same limits continue under the Income-tax Act, 2025 from April 2026.
Default example
₹5,000 a month from 30 to 60 (₹18 lakh in total) growing at 10% a year gives about ₹1,13,96,627. With the minimum 20% annuity at 6%, the pension is about ₹11,397 a month and the lump sum ₹91,17,301, of which ₹68,37,976 is tax-free.
FAQ
How much NPS corpus will I have with ₹5,000 a month?
From 30 to 60 at 10% a year, about ₹1,13,96,627. Your own contributions total ₹18,00,000.
How much can I withdraw from NPS at 60?
Up to 80% as a lump sum if the corpus is above ₹12 lakh (the rest buys an annuity), up to ₹6 lakh if it is ₹8–12 lakh, and all of it if it is ₹8 lakh or less.
Is the NPS lump sum tax-free?
Up to 60% of the corpus is tax-free. Anything you withdraw above 60% is taxable at your slab rate.
What pension will I get from NPS?
It depends on the annuity: ₹10 lakh at a 6% annuity rate pays about ₹5,000 a month. With ₹5,000 a month invested from 30, the 20% annuity gives about ₹11,397 a month.
Sources (checked 5 November 2026): PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025 (December 2025; reported by Business Today, Upstox and Value Research); Income-tax Act provisions on NPS — 60% exemption of lump sum (s.10(12A) of the 1961 Act, continued in the 2025 Act), 80CCD(1), 80CCD(1B), 80CCD(2) at 14% in the new regime; Finance Act 2026. Returns are assumptions, not PFRDA data.