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TAX TREATMENT ON WITHDRAWAL OF NPS AT AGE OF 63

27 November 2019

if NPS is withdrew on age of 63..
what will be the tax treatment of following
1)60% of corpus rec'd
2)40% of corpus invested in purchasing annuity plan..

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160342 Points)
Replied 28 November 2019

The 60% corpus amount is tax exempt...

While the annuity received from the 40% amount invested is taxable on annual basis ...

1 Like

shikha taparia (47 Points)
Replied 28 November 2019

Pls also provide reference...

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160342 Points)
Replied 01 December 2019

FAQs_for_NPS-Lite_and_Swavalamban_on_Exit_under_NPS

Kapadia Pravin (17249 Points)
Replied 02 December 2019

The government has made the NPS more tax friendly by offering complete tax exemption to the 60% of the corpus that an investor can withdraw on maturity.

When they retire, NPS investors have to use 40% of the corpus to buy an annuity and can withdraw the remaining 60% of the corpus.

Till now, only 40% of this withdrawn amount was tax free, while the remaining 20% was taxed.