Income Tax

Tax exemption-Partial withdrawal from NPS not exceeding 25% of the contribution made by an employee from assessment year 2018-19

Tax exemption-Partial withdrawal from NPS not exceeding 25% of the contribution made by an employee from assessment year 2018-19

Budget 2017-18 : Tax-exemption to partial withdrawal from National Pension System (NPS)

The existing provision of section 10(12A) provides that payment from National Pension System (NPS) trust to an employee on closer of his account or opting out shall be exempt up to 40% of total amount payable to him. 

In order to provide further relief to an employee subscriber of NPS, it is proposed to amend the section 10 so as to provide exemption to partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under. 

This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-19 and subsequent assessment years.

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