National Pension Scheme (NPS)

National Pension Scheme (NPS) is basically a pension scheme sponsored by the government wherein an eligible citizen can contribute to a pension account on a regular basis to receive benefits after retirement. It was launched in January 2004 and was made available to citizens of all sections between the age of 18-60 from 2009. Overall, the objective of the National Pension Scheme is to make sure that the citizens earn a decent return on investments after their retirement.

Types of National Pension Scheme

There are only two types of NPS accounts:

  1. Tier-I NPS Account– It is a basic type of pension account with withdrawal limitations.
  2. Tier-II NPS Account– In this type, the withdrawals are not limited in this voluntary savings option.


NPS is for all Indian citizens, both residents as well as NRIs. However, the following are the eligibility criteria should be met:

  1. The Minimum age of a subscriber should be at least 18 years and less than 65 years of age at the time of application.
  2. The applicant must be mentally healthy.
  3. The conditions of KYC should be adhered mentioned on the registration form by the subscriber before signing the form.

Documents required

  • Subscriber registration form.
  • Photo ID proof.
  • Proof of Date of Birth (DOB).
  • Proof of residence.

How to join the National Pension Scheme?

Following are the steps:


First and foremost step is to obtain a Permanent Retirement Account Number (PRAN) application form. It is available at Service Providers (POP-SP) and is available online from the NPS official website. Make sure that the details are filled correctly. You can download PRAN application form below:


Now, submit the PRAN application form at the nearest point of presence-service provider (POP-SP).


Then track the PRAN application using the link:


Submit the first contribution slip. At the time of applying for registration, a minimum Rs. 500 should be contributed. Additionally, an NCIS (instruction slip) should be submitted, stating the details of the payment made towards the PRAN account.

Partial Withdrawal from National Pension Scheme 

As per the law of Pension, withdrawal is not allowed until maturity i.e until the retirement age. Same as the other pension plans, the National Pension Scheme allows partial withdrawals, but only for specific reasons (medical issues, for higher education/marriage of children)

It has been decided by the Pension Fund Regulatory and Development Authority (PFRDA) that the NPS subscribers will now be permitted to make partial withdrawals to attain new skills or improve one’s employability by acquiring a technical or professional qualification.

Partial withdrawals under specific circumstances as specified in such regulations in accordance with the PFRDA is eligible for subscribers who have subscribed to this scheme at least for a period of three years from the date of joining and can withdraw for a maximum of 3 times during the advancing period.

Partial withdrawals form National Pension scheme u/s 10 (12A) actually refers to the relief made by the Pension Fund and Regulatory Development Authority (PFRDA) by easing the norms for partial withdrawal. Any pensioner of 60 years of age is admissible to withdraw 60% of his contribution and the balance 40% must be utilized to buy an annuity. Before the maturity, if the subscriber exists then only 20% of the contribution is allowed to be withdrawn and the balance if which is taxable.

According to section 10 of the Income Tax Act, the closure of the account or opting out of the scheme, the payable amount would be exempted from tax if the amount is within 40% of the contribution. On the other hand, the existing provision of section 10(12A) of Income Tax Act, 1961 states that a tax-exempt up to 40% of the total amount payable. It may further provide reliefs to the subscribers of the National Pension Scheme were also made on partial withdrawals by inserting a new clause (12B) to section 10 of the Income Tax Act. But the partial withdrawal is related to the contribution of the subscriber. Overall, it means that the amount withdrawn by the pensioner is tax-free if it does not exceed 25% of the total contribution. Other relaxations were also made besides this.


For more details such as ESI Registration, EPF registration you can visit our website: LegalRaasta. Our Experts will help you get you registered. Hurry up! Give us a call at 8750008585 and feel free to send your query on Email:

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