# How to Close NPS Account: Exit Process, Rules and Tax (2025 Guide)

If you are wondering whether to exit your NPS account, you are not alone. I have walked through the exact rules so you can make this decision with confidence. Whether you are turning 60 or need funds sooner, here is what actually matters. ## Normal Exit (After 60)

- At least 40 percent of your savings must go into an annuity (like a monthly pension plan)
- The remaining 60 percent can be taken as a lump sum anytime
- You can delay that lump sum until 75 or 85 if you would rather
- You do not have to do this at 60 — you can stay enrolled until 85 if you prefer

## Early Exit (Before 60)

- You can leave earlier but need to be stricter: 80 percent goes to annuity
- If your total savings are under 5 lakh, you can take the full amount
- Some special schemes require 40 percent annuity at 60 even if you are early

## What Happens If You Die

- 20 percent goes to your nominee right away
- The rest goes after a court confirms you are presumed dead
- If you die after 60, the full amount goes to your nominee

## Taking Money Before Exit (Partial Withdrawal)

- After 3 years in NPS, you can take up to 25 percent of your own contributions
- That is for things like medical bills, buying a home, or starting a business
- Before 60, you can do this 4 times with 4 years between withdrawals
- After 60, no limit but 3-year gaps between withdrawals

## How to Actually Exit (Step-by-Step Process)

1. Fill out an application at your Point of Presence (PoP) or nodal office
2. Show ID, address proof, and bank details
3. They verify and send it to the central system
4. Money usually takes 5 working days: 
    - Lump sum to your bank account
    - Annuity payments to your chosen provider

## Important Money Stuff (Tax Rules)

- 60 percent of your lump sum at normal exit is tax-free (that is Section 10(12A) tax relief)
- Annuity payments count as income and get taxed
- Withdrawals under 25 percent are tax-free
- Non-resident Indians must close entirely and take all money

## Myths to Skip

- You do not have to leave at 60
- You do not need to take everything — 40 percent annuity suffices
- Employer contributions cannot be withdrawn separately
- You cannot withdraw more than 25 percent at once before 60

## Frequently Asked Questions

### Can I close my NPS account before age 60?

Yes, premature exit is allowed anytime before 60. At least 80 percent of the corpus must purchase an annuity. If corpus is 5 lakh or less, you can withdraw the full amount. ### How much can I withdraw as lump sum at normal exit after 60?

60 percent of the accumulated corpus can be withdrawn as a tax-free lump sum. The remaining 40 percent must purchase an annuity. ### Is NPS exit mandatory at age 60?

No, exit is optional. You can continue your NPS account until age 85. ### What are the tax implications of NPS withdrawal?

60 percent lump sum at normal exit is tax-exempt under Section 10(12A). Annuity income is taxable per your slab. Partial withdrawals up to 25 percent of own contributions are tax-free. ### How many partial withdrawals are allowed in NPS?

Before 60: up to 4 withdrawals with a 4-year gap. After 60: unlimited withdrawals with a 3-year gap. Maximum 25 percent of own contributions per withdrawal. ### What documents are needed to close NPS account?

Exit application, identity proof, address proof, bank account details for penny-drop verification, and PRAN card. If you are planning to exit now, check how much you would get as a lump sum and whether annuity makes sense for your situation. It is a big financial move — take your time to get it right. ## Sources

- [PFRDA Exits and Withdrawals Regulations 2015 (Dec 2025 amendment)](https://pfrda.org.in/documents/33652/184762/PFRDA+%28Exits+and+Withdrawals+under+the+NPS%29+Regulations%2C+2015+%5BLast+amended+on+16+December+2025%5D.pdf)
- [PFRDA Master Circular on Partial Withdrawals (Jan 2024)](https://www.dsc.du.ac.in/wp-content/uploads/2024/02/Partial-Withdrawal-of-Accumulated-Pension-Wealth-Master-Circular-January-12-2024.pdf)
- [PFRDA FAQs — All Citizen Model](https://pfrda.org.in/documents/33652/676426/Exits+and+Withdrawals+under+NPS+for+All+Citizen+Model.pdf)
- [PIB Press Release on 2025 Exit Regulation Amendments](https://www.pib.gov.in/PressReleasePage.aspx?PRID=2206763)

*This article is for informational purposes only and is not financial advice. Rules are as per PFRDA (latest amendment Dec 2025). Verify with official sources before acting.*