What changed
| Before | Now (non-government) | |
|---|---|---|
| Minimum annuity at 60 | 40% | 20% (corpus above ₹12 lakh) |
| Maximum lump sum | 60% | 80% |
| Full withdrawal allowed if corpus is | ₹5 lakh or less | ₹8 lakh or less |
| Corpus ₹8–12 lakh | — | Up to ₹6 lakh lump sum, rest over ≥6 years or annuity |
| Normal exit | At 60 | At 60 or after 15 years, whichever is first |
| Stay invested until | 75 | 85 |
Leaving before 60
For an early (voluntary) exit, 80% of the corpus must still buy an annuity and only 20% comes back as cash — unless the corpus is ₹5 lakh or less, when you can take it all. The old 5-year lock-in has gone.
The tax catch
The tax law has not caught up with the 80% option: only 60% of the corpus is exempt. Take 80% and 20% is added to that year’s income. Two common ways to soften that: take 60% as a lump sum and the next 20% through systematic withdrawals over several years, or simply annuitise 40%.
The pre-filled example
Age 45, ₹2 lakh already in NPS, ₹8,000 a month, 9% a year: corpus at 60 about ₹38,17,559. With a 20% annuity you could take ₹30,54,047 as a lump sum (₹22,90,535 tax-free) and get about ₹3,818 a month of pension.
Government employees
Central and state government subscribers keep the 40% minimum annuity (and many can move to the Unified Pension Scheme). This calculator is for the All Citizen and Corporate models.
Partial withdrawals before exit
You do not have to wait until 60 for everything. After three years in NPS you can make partial withdrawals of up to 25% of your own contributions for specified purposes — children’s higher education or marriage, buying or building a first house, treatment of specified illnesses, disability, or skill development — subject to limits on how often. These withdrawals are tax-free.
When you reach 60, compare your options calmly: a lump sum, systematic withdrawals spread over years, and an annuity. Systematic unit redemption keeps the money invested while paying you regularly, which can be useful for the part above 60% that would otherwise be taxed in one year. PFRDA’s CRA portals (Protean, KFintech, CAMS) show your exact corpus and the options available to your account.
Key NPS figures (checked 5 November 2026)
| Item | Figure |
|---|---|
| Lump sum at 60 (corpus above ₹12 lakh) | Up to 80%; at least 20% annuity |
| Corpus ₹8–12 lakh | Up to ₹6 lakh lump sum |
| Corpus up to ₹8 lakh | 100% lump sum allowed |
| Tax-free share of corpus | 60% |
| Employer contribution deduction (new regime) | Up to 14% of basic + DA |
| Employer PF + NPS + super tax-free cap | ₹7.5 lakh a year |
FAQ
Can I withdraw 80% of NPS at 60?
Yes, if you are a non-government subscriber and your corpus is above ₹12 lakh. At least 20% must buy an annuity.
Can I take the whole NPS amount at 60?
Yes, if the corpus is ₹8 lakh or less.
What corpus does ₹8,000 a month from 45 give?
About ₹38,17,559 at 60 with ₹2 lakh to start and a 9% annual return.
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.