New NPS Rules 2025: Exit Rules for Government vs Private Employees

New NPS Rules 2025: Exit Rules for Government vs Private Employees

Below is a simple, point-wise comparison of the new rules.

1️⃣ Exit Age & Deferment Option Both government and private NPS subscribers can exit NPS at 60 years.

Both can delay withdrawal and annuity purchase up to 85 years.

This allows subscribers to stay invested longer if they wish.

2️⃣ 100% Withdrawal at Retirement (Small Corpus Benefit) If the total NPS corpus is up to ₹8 lakh:

100% withdrawal is allowed for both government and private subscribers.

This helps retirees with smaller savings avoid compulsory annuity purchase.

3️⃣ Annuity Requirement – Key Difference This is where the major difference lies:

Government employees

Must use 40% of corpus to buy annuity

Applies when corpus exceeds ₹12 lakh

Private sector employees

Need to annuitise only 20% of corpus

Allows much higher lump-sum withdrawal

4️⃣ Lump-Sum Withdrawal at Retirement Because of lower annuity requirement:

Government NPS subscribers

Can withdraw up to 60% of the corpus

Private NPS subscribers

Can withdraw up to 80% of the corpus

➡️ Private NPS offers more flexibility and liquidity at retirement.

5️⃣ New ₹8–12 Lakh Slab (Applies to Both) For corpus between ₹8 lakh and ₹12 lakh:

Up to ₹6 lakh can be withdrawn upfront

Remaining amount must be taken via annuity or systematic withdrawal

This slab system removes confusion and brings uniform rules.