Dear Sir/Madam,
I want to know the taxation rules for NPS full exit without any annuity option for the corpus below 5 lakh.
As per the NPS rules after 5 years & corpus below 5 lakh full lumpsum exit is allowed without opting for any annuity.
What will be taxation in that case?
Please guide
If NPS corpus is below ₹5 lakh and full withdrawal is made before age 60:
60% of corpus is tax exempt
40% of corpus is taxable as per slab
Even though annuity is not mandatory, tax exemption remains limited to 60%.
As clarified by CBDT Circular No. 7/2018 dated 20.12.2018, where full withdrawal of accumulated corpus under NPS is permitted as per PFRDA regulations (small corpus cases), the entire amount so withdrawn shall be exempt under Section 10(12A) of the Income Tax Act, 1961.
Thankas a lot for the information
SKAA & Associates
New Delhi
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Jawahar and Associates Chartered Accountants
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