NPS Exit Rules 2025: Take 80% Lump Sum, Defer up to Age 85

Kashvi Pathak, retiring at 60 from a private firm, can now take up to 80% of her NPS corpus as cash and put just 20% into an annuity. The old rule forced her to lock 40% into a pension product. Here is exactly what she gets at three corpus sizes.

The shift came through the PFRDA Exits and Withdrawals Amendment Regulations, 2025, notified in December 2025 by the Pension Fund Regulatory and Development Authority (PFRDA). It rewrites how much of your retirement pot you can pull out in cash, and when you must do it.

If you are short on time: jump to the step-by-step exit on the CRA portal and the corpus table above.

The 80/20 rule is for non-government subscribers only. That means the All Citizen Model (people who opened NPS on their own) and Corporate NPS (employees enrolled through a company).

Government subscribers are treated differently. The 60% lump sum and 40% annuity rule continues for them, with one relief described below.

Note: this article is about the proportions at normal exit (on retirement or age 60). That is a different thing from taking money out before retirement. For loans, education, housing or medical needs while you are still working, see the NPS Tier 1 partial withdrawal rules. Do not confuse the two.

• More cash in hand. A non-government subscriber can now take up to 80% as a lump sum, up from 60%. Compulsory annuity drops from 40% to 20%.
• Small corpus, full freedom. Corpus up to ₹8 lakh: take 100% as a lump sum, no annuity at all. (This relief also applies to government subscribers.)
• The middle band. Corpus between ₹8 lakh and ₹12 lakh: you can take up to ₹6 lakh as a lump sum; the balance goes to an annuity or a systematic withdrawal.
• Above ₹12 lakh. At least 20% must be annuitised; up to 80% is withdrawable.
• Defer for longer. You can now defer the annuity purchase or the lump-sum withdrawal up to age 85. The earlier limit was 75. That gives 25 extra years for the corpus to stay invested after age 60.

Kashvi retires at 60 with ₹40 lakh in her NPS Tier 1 account.

1. Old rule: ₹24 lakh (60%) as lump sum, ₹16 lakh (40%) locked into an annuity.
2. New rule: up to ₹32 lakh (80%) as a lump sum, ₹8 lakh (20%) to an annuity.

That is ₹8 lakh more cash in hand at retirement, and half the amount tied into a pension product. She could also defer and let the corpus keep compounding until as late as age 85.

Exit is processed through the Central Recordkeeping Agency (CRA) portal linked to your NPS account.

1. Log in to the CRA portal using your PRAN (Permanent Retirement Account Number) and password.
2. Raise the exit / withdrawal request under the exit menu and select the normal exit on superannuation option.
3. Choose your split. Pick how much you want as a lump sum (up to 80%, or 100% if your corpus is up to ₹8 lakh) and how much to annuitise (at least 20% above ₹12 lakh).
4. Select the annuity service provider and annuity plan for the portion you must annuitise, if any.
5. Upload KYC documents (identity, address, bank proof and a cancelled cheque) and complete e-sign or OTP verification.
6. Submit and track. The request flows to your nodal office or point of presence for authorisation, then to the CRA for processing.

If your corpus is up to ₹8 lakh, the annuity steps are skipped and the full amount is paid out.

The tax treatment of the higher lump sum is not settled in plain terms here. Before you withdraw, check the latest income tax rules for NPS exit and, if the amount is large, consult a tax adviser. Do not assume the extra 20% you can now withdraw is tax-free.

• Find your PRAN and confirm whether you are in the All Citizen, Corporate or government model.
• Log in to the CRA portal and check your current corpus value.
• Decide your lump-sum versus annuity split using the table above for your corpus band.
• If you do not need the cash at 60, note the new age-85 deferment option and ask your point of presence how to defer.
• If you are still working and need money now, read the partial-withdrawal page instead of triggering an exit.

• NPS Tier 1 partial withdrawal rules and process
• How to open an NPS account
• Old Pension Scheme vs NPS compared
• Section 80CCD 1B: the extra ₹50,000 NPS deduction

For a deeper, step-by-step approach to using your right to information when a pension or PFRDA grievance is stuck, see The RTI Playbook.

Yes, if you are a non-government subscriber (All Citizen or Corporate NPS) exiting at superannuation. The PFRDA Exits and Withdrawals Amendment Regulations, 2025 raised the lump sum ceiling to 80% and cut the compulsory annuity to 20%. Above a ₹12 lakh corpus, at least 20% must still be annuitised.

If your corpus is up to ₹8 lakh, you can withdraw 100% as a lump sum with no annuity at all. So a ₹5 lakh corpus can be taken fully in cash. This relief applies to both government and non-government subscribers.

No. For government subscribers the older 60% lump sum and 40% annuity rule continues. They do get the same ₹8 lakh relief, where a corpus up to ₹8 lakh can be taken 100% as a lump sum. The 80/20 split is only for non-government subscribers.

Non-government subscribers can now defer the annuity purchase or the lump-sum withdrawal up to age 85, up from the earlier limit of 75. This lets your corpus stay invested for up to 25 more years after age 60 before you must complete the exit.

The verified rules here do not settle the tax treatment of the higher lump sum. Check the latest income tax rules for NPS exit and consult a tax adviser before withdrawing a large amount. Do not assume the extra portion you can now take is automatically tax-free.

No. This page covers the proportions at normal exit on retirement or age 60. Pre-retirement partial withdrawals for needs like education, housing or medical care follow separate limits. See the partial withdrawal rules for that.