🏦 NPS 80% Lump Sum Calculator FY 2025-26
New PFRDA Rules: 80% Lump Sum | 100% Withdrawal for ₹8L Corpus | SUR Calculator
🎉 Updated Feb 2026: 80% Withdrawal + SUR + Extended Age 85
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Different rules apply – Non-Govt can withdraw up to 80%
Your total accumulated NPS balance at retirement
Normal retirement age is 60 years
Non-Govt: Up to 80% | Govt: Up to 60%
Average annuity rate is 5.5% – 7% per annum
📚 NPS 80% Lump Sum Withdrawal Rules – December 2025 Update
🎉 Latest Update (December 2025): PFRDA has amended the NPS Exit and Withdrawal Regulations introducing the NPS 80% Lump Sum Rule for non-government subscribers, 100% withdrawal option for ₹8 lakh corpus, and new Systematic Unit Redemption (SUR) facility for ₹8-12 lakh corpus range.
NPS 80% Lump Sum Calculator – Normal Exit at Age 60+
For Non-Government Subscribers (All Citizen Model & Corporate NPS) – 80% Lump Sum Rule:
- 80% Lump Sum Withdrawal: You can withdraw up to 80% of your corpus as lump sum (increased from 60% – new rule from Feb 2026)
- 20% Annuity Purchase: Minimum 20% must be used to purchase annuity (reduced from 40%)
- Tax-Free Amount: Currently, only 60% lump sum withdrawal is tax-free under Section 10(12A). The additional 20% (between 60-80%) may be taxable until tax laws are updated
- NPS 100% Withdrawal for ₹8 Lakh Corpus:
- If corpus ≤ ₹8 lakh: 100% lump sum withdrawal allowed, annuity purchase is completely optional – full flexibility!
- Tax Benefit: Up to 60% is tax-free, amount above 60% may attract tax
- NPS SUR Calculator – For ₹8-12 Lakh Corpus:
- If corpus ₹8-12 lakh: Up to ₹6 lakh can be taken as lump sum
- Systematic Unit Redemption (SUR): Balance amount can be withdrawn via SUR over minimum 6 years OR through annuity
- SUR Benefits: Gradual withdrawals, stay invested longer, market-linked returns, flexible redemption schedule
- Example: ₹10 lakh corpus = ₹6 lakh lump sum + ₹4 lakh via SUR (₹5,555/month for 72 months)
- For corpus > ₹12 lakh: Standard 80/20 rule applies (80% lump sum, 20% annuity mandatory)
For Government Employees – 60/40 Rule Continues:
- Existing 60:40 Rule: Maximum 60% lump sum, minimum 40% annuity (unchanged for govt employees)
- 100% Withdrawal for Small Corpus:
- If corpus ≤ ₹8 lakh: 100% lump sum allowed (same benefit as non-govt)
- If corpus ₹8-12 lakh: Up to ₹6 lakh lump sum, balance via annuity or Systematic Lump-sum Withdrawal (SLW)
What is NPS SUR (Systematic Unit Redemption)?
Systematic Unit Redemption (SUR) is a new withdrawal method introduced in December 2025 for corpus between ₹8-12 lakh:
- Gradual Withdrawal: Withdraw your NPS corpus systematically over a minimum period of 6 years
- Stay Invested: Your remaining corpus continues to earn market-linked returns while you make withdrawals
- Flexibility: Choose your withdrawal frequency and amount within regulatory limits
- Alternative to Annuity: Gives you more control compared to traditional annuity products
- How it Works: After taking ₹6 lakh lump sum, remaining ₹2-6 lakh can be redeemed via SUR in installments
- Benefit: Potential for higher returns than annuity rates (subject to market performance)
Premature Exit Before Age 60
If you exit NPS before attaining 60 years (allowed after completion of subscription tenure):
- Lump Sum Withdrawal: Maximum 20% of corpus
- Annuity Purchase: Mandatory 80% must be used to purchase annuity
- Tax Implication: 20% lump sum is tax-free; pension from 80% annuity will be taxed as per income slab
- Small Corpus Exception: If corpus ≤ ₹2.5 lakh (increased from ₹1 lakh), 100% withdrawal allowed
Partial Withdrawal (Updated Rules)
During the accumulation phase, partial withdrawal is permitted:
- New Limit: Up to 4 withdrawals allowed (increased from 3)
- Frequency: Minimum 4 years gap between withdrawals before age 60; 3 years gap after age 60
- Amount: Maximum 25% of own contributions (excluding employer contributions)
- Permitted Reasons:
- Children’s higher education or marriage
- Purchase/construction of residential house (one-time)
- Medical treatment/hospitalization (expanded coverage, not limited to critical illnesses)
- Settlement of loans taken against NPS corpus (new provision)
- Tax Treatment: Tax-free if conditions are met
New Provisions – December 2025
- Extended Age Limit: Both government and non-government subscribers can now stay invested until age 85 (increased from 75 for govt and 70 for non-govt)
- Systematic Unit Redemption (SUR): New withdrawal method for corpus between ₹8-12 lakh, allowing gradual withdrawals over minimum 6 years
- NPS as Collateral: Subscribers can pledge their NPS account to secure loans from regulated financial institutions, capped at 25% of own contributions
- Citizenship Renunciation: If you cease to be an Indian citizen, you can withdraw 100% corpus as lump sum
- Missing Person Provision: Nominees can receive 20% interim relief after FIR filing
Death of NPS Subscriber
In case of unfortunate death of the subscriber:
- Nominee/legal heir can withdraw 100% of accumulated corpus
- Entire amount is tax-free
- No mandatory annuity purchase required
- For corpus ≤ ₹8 lakh, full lump sum withdrawal available
Tax Benefits of NPS
- Section 80C: Deduction up to ₹1.5 lakh for employee contribution
- Section 80CCD(1B): Additional deduction up to ₹50,000 (total ₹2 lakh)
- Section 80CCD(2): Employer contribution up to 10% of salary (14% for central govt) – no upper limit
- Withdrawal Tax: 60% lump sum completely tax-free; additional 20% (if withdrawn) currently taxable
- Partial Withdrawal: Tax-free if for specified purposes
Important Tax Clarification: While PFRDA now allows non-government subscribers to withdraw up to 80% as lump sum, current Income Tax Act provides tax exemption only for 60%. The additional 20% (between 60-80%) may attract tax as per your income slab until the tax laws are amended. Many experts expect Budget 2026 to align tax benefits with the new NPS rules.
Who Should Invest in NPS?
The 2025 amendments have made NPS significantly more flexible and attractive, especially for:
- Self-employed professionals seeking tax-efficient retirement planning
- Private sector employees wanting higher liquidity at retirement
- Individuals starting retirement planning late (can now invest until 85)
- Those seeking low-cost, market-linked retirement solutions
- People wanting flexibility between lump sum and pension income
Key Benefits of Updated NPS (2025) – 80% Lump Sum & SUR
- Higher Liquidity with 80% Lump Sum: Access to 80% of corpus for non-government subscribers (vs 60% earlier)
- 100% Withdrawal Freedom: Full flexibility for corpus ≤ ₹8 lakh – no annuity required
- Lower Annuity Lock-in: Only 20% mandatory annuity for non-govt (vs 40% earlier) – 50% reduction!
- NPS SUR Option: Systematic Unit Redemption for ₹8-12 lakh corpus – better than traditional annuity
- Extended Investment Period: Stay invested until age 85 (increased from 70/75)
- More Partial Withdrawals: 4 withdrawals instead of 3 during accumulation phase
- Loan Facility: Can pledge NPS for emergency loans up to 25% of contributions
- Low Cost: Among the lowest-cost retirement products in India (0.01% fund management fees)
- Professional Management: Choice of fund managers and investment options (E, C, G funds)
- Portability: Single PRAN account across jobs and locations – lifetime validity
Annuity Service Providers
PFRDA-empanelled life insurance companies include: LIC, SBI Life, HDFC Life, ICICI Prudential Life, Star Union Dai-ichi Life, Bajaj Allianz Life, Kotak Mahindra Life, Max Life, and others. Compare annuity rates before choosing at the time of exit.