NPS Vatsalya Partial Withdrawal Rules

NPS Vatsalya allows partial withdrawal after 3 years of account opening, providing flexibility for important life events. This guide explains the conditions, limits, and process for partial withdrawal.

Partial withdrawal rules

Eligibility

• After 3 years from the date of account opening
• Only for specific purposes (see below)

Allowed purposes

1. Education of the minor subscriber
2. Treatment of specified illnesses
3. Disability of more than 75% of the minor subscriber

Limits

• Maximum 25% of total contributions (excluding returns)
• Up to 2 partial withdrawals before the subscriber turns 18
• 2 additional partial withdrawals between ages 18-21 (after KYC completion)

How much can you withdraw?

Total Contributions (after 3 years)	Max Withdrawal (25%)
Rs 1,000 (min)	Rs 250
Rs 25,000	Rs 6,250
Rs 50,000	Rs 12,500
Rs 1,00,000	Rs 25,000
Rs 2,50,000	Rs 62,500

Note: The 25% limit is on contributions only, not on the total corpus (which includes returns). For example, if you contributed Rs 2,50,000 and the corpus is Rs 3,50,000, you can withdraw up to Rs 62,500 (25% of Rs 2,50,000).

What qualifies as a specified illness?

Specified illnesses include:

• Cancer
• Kidney failure
• Heart disease requiring surgery
• Liver disease
• Other life-threatening conditions

A medical certificate from a government hospital is required as proof.

Process for partial withdrawal

1. Submit a declaration stating the purpose (education, illness, disability)
2. For illness: attach medical certificate from a government hospital
3. For education: attach admission letter or fee receipt
4. For disability: attach disability certificate
5. The CRA processes the request
6. Funds are transferred to the subscriber's/guardian's bank account

Tax implications

Partial withdrawal up to 25% of contributions is tax-exempt under Section 10(12BA) of the Income Tax Act. No tax is payable on the withdrawal amount.

What happens to the remaining corpus?

After a partial withdrawal, the remaining corpus continues to grow. You can continue making contributions. The account continues under the same terms until the subscriber turns 18.

Partial withdrawal frequency

Age Range	Max Withdrawals
0-18 years	2
18-21 years	2 (after KYC)
Total	4

Disclaimer

Partial withdrawal rules are based on PFRDA NPS Vatsalya Scheme Guidelines 2025. Verify with PFRDA before making any withdrawals.

Eligibility: After 3 years from account opening
Limit: Up to 25% of contributions (excluding returns)
Frequency: 2 times before 18, 2 more between 18-21
Purposes: Education, specified illness, disability over 75%