Nps rules and regulations

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This discussion clarifies National Pension System (NPS) rules regarding account activity and withdrawals. It confirms that a minimum contribution of Rs 1,000 per financial year is needed to keep the account active. Furthermore, if the pension corpus is less than Rs 2,00,000, it can be fully withdrawn as a lump sum, though this amount will be subject to tax.

ntc pioneer

ntc pioneer (Querist)

24 July 2023 Nps tier 1 account opened in feb 2021
Contribution- FY 20-21Rs 50000-deduction claimed under 80 ccd(1b)
Contribution- FY 21-22Rs 50000-deduction claimed under 80 ccd(1b)
Contribution- FY 22-23Rs 1000
Contribution- FY 23-24Rs 1000

With respect to the above information please clarify the following points

1) what is the minimum contribution per financial year required to keep the account active ?

2) can this account be prematurely closed or amount partially/fully withdrawn ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 July 2023 1 It's Rs 1000.
2 In case the pension corpus is less than Rs. 2,00,000, it can be withdrawn 100% as lumpsum.

ntc pioneer

ntc pioneer (Querist)

25 July 2023 Thank you sir.I would like to know if there is a minimum lock in period before 100% withdrawl of the amount in the above case, as additional deduction under section 80ccd(1b) was claimed in 2 financial years.

ntc pioneer

ntc pioneer (Querist)

25 July 2023 Also will the withdrawn amount be taxable ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 July 2023 Withdrawal amount is taxable.

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