How​‍​‌‍​‍‌​‍​‌‍​‍‌ to Close Your NPS Account

The idea of closing your NPS account, which is a National Pension System (NPS) account, might be a little overwhelming or stressful. However, it doesn't have to be like that. If you have retired, want to withdraw your money before the maturity, or have any other reason, this article will help you understand the steps in a simple manner. Let us go through the process, step by step!

When Are You Allowed to Close Your NPS Account?

Basically, the closing of your NPS account can happen under three circumstances:

• At the age of 60 (retirement) – the period when you can start enjoying the fruits of your saving.
• Exiting the system earlier – only before 60 and under specific conditions.
• If the subscriber dies – in this case, the nominees can claim and close the account.

It's worth remembering that the regulations are there to keep your retirement money safe while still allowing you some flexibility.

What Does It Mean to Close NPS?

Closely associated with account closure is the return of the accumulated money (called the corpus) to the account holder partly as a lump sum and partly as a monthly income (annuity). If the total savings are less than ₹5 lakh, then one is free to take the whole amount. But in a situation where the savings exceed that amount, one has to use a portion of the money (normally 40% if retiring after 60, or 80% if leaving the pension plan prematurely) to purchase an annuity plan for future regular income. This is how your retirement funds are still working for you.

How to Close an NPS Account Online Step-by-Step

• Sign in to the official CRA portal – This is the website where you perform online operations with your NPS account. Enter your PRAN (Permanent Retirement Account Number) together with a password.
• Go to the Exit Request section – Here you will select the reason for departure: from retirement, early exit, or closure by the nominee in the case of the death of the subscriber.
• Upload the Documents 
  • You will be required to upload:
  • Your PRAN card (or an affidavit if it has been lost)
  • Identity proof (e.g., Aadhaar or PAN card)
  • Address proof
  • Bank account details (where the money is to be sent)
  • Relevant forms (e.g. Form 101 for retirement, Form 301 for premature exit).
• Verify your details and submit - All personal details and bank information should be correct and up to date. After that, the request is authorized through an OTP verification that is sent to the registered mobile number.
• Digitally sign your application - Use an e-signature to complete account closure, which is usually verified by your Aadhaar.
• Processing your request - The system will approve the request and will send the money to the bank account that has been linked.

What If You Wanna Close Your NPS Without the Use of the Internet?

Alternatively, you can take all your relevant documents and forms and go to the nearest Point of Presence (PoP) or Nodal Office. Fill in the exit form with your details and hand it over to the officials. It’s the same process after the submission and it takes a few weeks.

Important Tips Before You Close Your NPS Account

• Start early: At least 6 months before your intended retirement, you should initiate the exit procedure.
• Mobile number: It is essential that your Aadhar reflects your latest telephone number so that you can easily receive OTP.
• Annuity: You should look over the pension providers and decide which will best suit you in providing a steady income after you leave.
• Tax rules: Generally, lump sum withdrawals are free of tax if the NPS exits after 60. There is a chance that early withdrawals will be taxed, so be aware of it!
• Nominee Role: If the subscriber unfortunately passes away, the nominee can get the entire corpus by presenting a death certificate and identification papers.

Conclusion 

Deciding to close your NPS account is an important move, but with the right guidance and a composed demeanor, it is neither complicated nor overwhelming. You may do it by following the friendly steps and keeping your paperwork in order. During the interim, be patient. Soon you will have the privilege of reopening your NPS account to make further investments or to withdraw the funds you need for a comfortable ​‍​‌‍​‍‌​‍​‌‍​‍‌retirement.

FAQs on How​‍​‌‍​‍‌​‍​‌‍​‍‌ to Close Your NPS Account

1. What should I do if I lost my PRAN?
   1. You may contact your PoP or visit NPS portals and register yourself there.
2. What if my documents are inconsistent?
   1. Ensure all the documents that you have uploaded are accurate and consistent with your NPS registration.
3. Am I allowed to close the NPS if I haven't paid my contributions for a long time?
   1. Yes. However, you should know the regulations concerning a premature exit and the requirements for annuity.