Yes, you can withdraw money from your NPS Tier-I account before final exit, but only for specific purposes and subject to limits.
Under the NPS rules applicable in 2026, the maximum partial withdrawal is generally 25% of your own contributions, excluding investment returns. The rules on how often you can withdraw depend on whether you are before or after age 60.
This is different from withdrawing your entire NPS corpus at retirement. A partial withdrawal allows you to take out a limited amount while keeping the NPS account active.
How much can you withdraw from NPS?
The 25% limit is calculated on your own contributions, not on the total NPS corpus.
This distinction matters because your NPS corpus includes both contributions and investment returns.
For example, suppose:
- Your own NPS contributions = ₹8 lakh
- Employer contributions, if any = ₹4 lakh
- Investment returns = ₹5 lakh
- Total NPS corpus = ₹17 lakh
Your first partial withdrawal is not 25% of ₹17 lakh.
For the first withdrawal, the maximum is generally 25% of your own contributions, so:
₹8 lakh × 25% = ₹2 lakh
The ₹5 lakh investment return is not included in this calculation.
When can you make your first NPS partial withdrawal?
You must complete at least three years of subscription to NPS before making your first partial withdrawal. This three-year requirement applies even if you joined NPS after turning 60.
So if you joined NPS on 1 August 2023, you would generally become eligible for the first partial withdrawal after completing three years of subscription.
You cannot make a partial withdrawal simply because you have an urgent need for money during the first three years.
What are the reasons for NPS partial withdrawal?
Partial withdrawal is allowed only for specified purposes.
For the All Citizen Model, the permitted purposes include:
- Higher education of children, including a legally adopted child
- Marriage of children, including a legally adopted child
- Purchase or construction of a residential house or flat
- Medical treatment or hospitalisation of yourself, your legally wedded spouse, children or parents
- Medical and incidental expenses arising from disability or incapacitation suffered by you
- Settlement of a financial obligation from a regulated financial institution where a lien or charge has been marked on your NPS account
This means you cannot make a partial withdrawal simply because you want to buy a car, take a holiday, invest somewhere else or meet an ordinary personal expense.
1. Higher education of children
You can use an eligible partial withdrawal for the higher education of your children, including a legally adopted child.
2. Marriage of children
Marriage of your child is another permitted purpose. A legally adopted child is also covered.
3. Buying or constructing a house
NPS permits a one-time partial withdrawal for purchasing or constructing a residential house or flat in:
- your own name, or
- your joint name with your legally wedded spouse.
There is an important restriction: if you already own a residential house or flat individually or jointly with your legally wedded spouse, other than ancestral property, this partial withdrawal is not permitted.
Unlike some of the other permitted purposes, the house-purchase or construction withdrawal can be used only once during the entire subscription period.
4. Medical treatment or hospitalisation
Partial withdrawal can also be used for medical treatment or hospitalisation of:
- yourself;
- your legally wedded spouse;
- your children, including legally adopted children; or
- your parents.
5. Disability or incapacitation
You can withdraw for medical and incidental expenses arising from disability or incapacitation suffered by you.
6. Financial obligation to a regulated financial institution
The current rules also permit partial withdrawal towards settlement of a financial obligation obtained from a regulated financial institution, where a lien or charge has been marked on the individual pension account.
This is not the same as having unrestricted access to your NPS balance as a normal loan facility. The financial assistance arrangement is subject to the applicable PFRDA framework and guidelines.
How many times can you withdraw from NPS?
The rules changed significantly under the current framework.
For the All Citizen Model, the frequency depends on your age:
| Situation | Maximum frequency | Minimum gap |
|---|---|---|
| Before age 60 | Up to 4 withdrawals | 4 years |
| After age 60 | No fixed maximum, until age 85 | 3 years |
You still need to satisfy the other eligibility conditions, including the three-year minimum subscription requirement for the first withdrawal.
This is an important update because older NPS articles commonly state that partial withdrawal is limited to three times. That information is outdated for the current All Citizen Model rules.
How is the second withdrawal calculated?
You cannot simply take 25% of your entire accumulated NPS contributions again every time.
For subsequent withdrawals, the calculation is based on incremental own contributions made after the previous withdrawal. Investment returns are excluded.
Example
Suppose your first withdrawal was made after your own contributions had reached ₹8 lakh.
You withdrew ₹2 lakh, which was 25% of ₹8 lakh.
After that, you make another ₹3 lakh of your own contributions.
Your next eligible amount based on the new contributions would be:
₹3 lakh × 25% = ₹75,000
So you cannot simply calculate 25% of your current total NPS corpus and withdraw that amount.
What if you did not use the full 25% during your first withdrawal?
There is an important provision here.
Suppose your eligible limit was ₹2 lakh, but you withdrew only ₹1.5 lakh.
The unused ₹50,000 does not necessarily disappear.
Under the current All Citizen Model FAQ, the unused portion can remain available for a subsequent withdrawal, along with 25% of the incremental own contributions made since the previous withdrawal.
For example:
- Previous eligible limit = ₹2 lakh
- Amount actually withdrawn = ₹1.5 lakh
- Unused amount = ₹50,000
- Incremental own contributions since previous withdrawal = ₹2 lakh
- 25% of incremental contributions = ₹50,000
The subsequent maximum could therefore be:
₹50,000 + ₹50,000 = ₹1 lakh
subject to the applicable rules and eligibility.
What changes after you turn 60?
The current rules are more flexible after age 60.
If you joined NPS before turning 60 and have already completed the required three-year subscription period, you do not have to wait another three years after turning 60 to make a partial withdrawal.
After 60, you can make partial withdrawals until age 85, with a minimum three-year gap between withdrawals.
The amount remains subject to the 25% rule based on the applicable contributions.
Example
Suppose you are 62 and have:
- NPS subscription period: more than 3 years
- Own contributions since your previous withdrawal: ₹6 lakh
Your maximum withdrawal based on those incremental contributions would be:
₹6 lakh × 25% = ₹1.5 lakh
The size of your total NPS corpus does not change this basic calculation.
Is the 25% calculated on the total NPS balance?
No.
This is probably the most important calculation to understand.
The maximum is based on the relevant own contribution amount, excluding appreciation or investment returns.
So if your account looks like this:
| Component | Amount |
|---|---|
| Your contributions | ₹10 lakh |
| Employer contributions | ₹5 lakh |
| Investment returns | ₹7 lakh |
| Total corpus | ₹22 lakh |
You should not calculate the partial withdrawal as 25% of ₹22 lakh.
For the first withdrawal, the relevant base is your own contributions:
₹10 lakh × 25% = ₹2.5 lakh
Is NPS partial withdrawal tax-free?
For an employee’s NPS account, the Income Tax Department states that partial withdrawal is exempt under Section 10(12B) to the extent of 25% of the employee’s contributions, provided the withdrawal complies with the applicable NPS conditions.
This does not mean every amount you receive from NPS is tax-free.
NPS has different tax rules for:
- partial withdrawals;
- final withdrawal at exit; and
- annuity/pension income.
For example, the Income Tax Department states that up to 60% of the corpus can be exempt on closure or opting out, while pension received from an NPS annuity is taxable.
Therefore, do not treat the 25% partial-withdrawal exemption as a general NPS withdrawal exemption.
What about NPS Vatsalya?
NPS Vatsalya is a separate scheme for minors, so its withdrawal rules should not simply be mixed with the rules for an adult subscriber’s regular NPS account.
For NPS Vatsalya, partial withdrawal can also receive tax exemption under Section 10(12BA), subject to the applicable conditions and a limit of 25% of the relevant contributions. The Income Tax Department says this provision applies from AY 2026-27.
How do you apply for partial withdrawal?
A partial withdrawal request is made through the NPS system/service provider.
PFRDA’s All Citizen Model FAQ states that withdrawal requests can be initiated by the subscriber through the pension account or by submitting the physical form to the relevant Point of Presence, along with the required documents.
The exact supporting documents can depend on the reason for withdrawal.
If the subscriber is unable to submit the application because of hospitalisation, the current FAQ states that a family member may submit the withdrawal request.
Don’t confuse partial withdrawal with NPS exit
This distinction matters.
Partial withdrawal means you take out an eligible amount while continuing with NPS.
Exit means you leave the pension scheme and settle the accumulated pension wealth according to the applicable exit rules.
The rules and amounts are different.
For the All Citizen Model, normal exit rules now generally permit up to 80% as lump sum and require at least 20% for annuity, subject to the specific corpus-based options under the current regulations.
That 80% figure has nothing to do with the 25% partial-withdrawal limit.
What is the biggest mistake to avoid?
Do not calculate your withdrawal limit using your total NPS corpus.
If your NPS statement shows ₹20 lakh, that does not mean you can withdraw ₹5 lakh simply because ₹5 lakh is 25% of ₹20 lakh.
You need to identify the relevant own contribution figure and apply the current partial-withdrawal rules.
Also, do not rely on older articles saying:
- partial withdrawal is available only three times;
- there must always be a five-year gap;
- only illness, education, marriage and house purchase are allowed.
Those rules have changed. PFRDA’s March 2026 All Citizen Model FAQ reflects the current framework.
Bottom line
NPS partial withdrawal is allowed, but it is not a general-purpose withdrawal facility.
For the current All Citizen Model rules:
- First withdrawal: after completing 3 years of NPS subscription.
- Maximum amount: generally 25% of your own contributions, excluding investment returns.
- Before age 60: up to 4 withdrawals, with at least 4 years between withdrawals.
- After age 60: no fixed maximum number until age 85, with at least 3 years between withdrawals.
- Permitted reasons: children’s higher education or marriage, one-time house purchase/construction subject to conditions, specified medical needs, disability/incapacitation-related expenses, and certain financial obligations to regulated financial institutions.
- Tax treatment: qualifying partial withdrawal is exempt up to the applicable 25% limit under Section 10(12B) for employees.
The key point is simple: your NPS balance is not the withdrawal limit. Your eligible own contributions are.
