The National Pension System (NPS) is widely known as a long-term retirement savings instrument designed to provide financial security after the age of 60. However, many subscribers are unaware that the system also allows partial withdrawals before retirement under specific circumstances.

As per rules applicable in 2026 and regulated by the Pension Fund Regulatory and Development Authority (PFRDA), NPS subscribers can access a portion of their savings during genuine financial emergencies — without dismantling their entire retirement corpus.

Here’s a detailed guide explaining eligibility, limits, permitted reasons, and the step-by-step withdrawal process.

Understanding the Three-Year Lock-In Rule

Before applying for a partial withdrawal, the most important requirement is the three-year completion rule.

• You can request a partial withdrawal only after completing three years from the date of opening your NPS account.
• Regular contributions during this period are essential.
• If your account has not completed three years, withdrawal is not permitted — even in emergency situations.

This rule ensures that NPS continues to function primarily as a long-term wealth creation and pension-focused product.

Valid Reasons for NPS Partial Withdrawal

The PFRDA has clearly outlined specific situations where partial withdrawal is allowed. These are limited to major life events or unavoidable financial needs.

You may withdraw funds for:

1. Medical Emergencies

Treatment of critical illnesses for:

• Yourself
• Your spouse
• Children
• Dependent parents

Relevant hospital bills and medical documents must be submitted.

2. Higher Education

Expenses related to your children’s higher education. Admission proof and institutional documentation are required.

3. Marriage Expenses

Withdrawal is permitted for your children’s marriage expenses, supported by valid documentation.

4. First Home Purchase or Construction

You can access funds for purchasing or constructing your first residential property, subject to document verification.

All withdrawal requests must be supported by proper and verifiable documentation.

How Much Can You Withdraw?

To safeguard retirement savings, there is a strict cap on withdrawal:

• You can withdraw up to 25% of your total self-contribution.
• Employer contributions are excluded from this calculation.

Major Advantage: Tax-Free Withdrawal

One of the key benefits is that partial withdrawals under NPS are completely tax-free, providing immediate relief without additional financial burden.

Once approved, the funds are directly credited to your registered bank account.

Step-by-Step Process to Apply for NPS Partial Withdrawal

Applying for partial withdrawal is relatively straightforward if you follow the correct procedure.

You can submit your request through:

• Your designated Point of Presence (PoP)
• Your Nodal Office (for government employees)
• The official NPS online portal

Application Process:

1. Log in to the NPS portal or visit your PoP/Nodal Office.
2. Submit a partial withdrawal request.
3. Upload or attach supporting documents related to the purpose.
4. Authorities verify the documents.
5. Upon approval, funds are transferred to your bank account.

Incomplete or incorrect documentation can delay processing, so accuracy is crucial.

How Many Times Can You Withdraw?

NPS allows partial withdrawals only a limited number of times during the entire tenure of the account.

While flexibility exists, it is not meant for repeated usage. The facility is designed exclusively for significant life events or serious financial emergencies.

Using it sparingly ensures that your retirement corpus remains largely intact.

Smart Financial Planning: Use NPS Withdrawal Carefully

The primary objective of the National Pension System is to build a stable pension income post-retirement. While the emergency withdrawal facility offers a financial cushion, it should ideally be considered a last resort.

Before opting for withdrawal, evaluate alternative options such as:

• Emergency savings funds
• Health insurance coverage
• Short-term loans or investments

If withdrawal becomes unavoidable, limit it strictly to the required amount to protect long-term retirement goals.

The NPS partial withdrawal provision provides a valuable safety net during critical life situations. Governed by the Pension Fund Regulatory and Development Authority, the system balances flexibility with long-term discipline.

When used responsibly, it helps subscribers address urgent financial needs without jeopardizing their retirement security.

Disclaimer

This article is intended for informational purposes only and does not constitute financial or investment advice. NPS rules and regulations are subject to change as per government and regulatory updates. Readers are advised to verify the latest guidelines through official NPS sources or consult a certified financial advisor before making any withdrawal decisions.