What changed in December 2025
| At normal exit | Before | Now (non-government) | Now (government) |
|---|---|---|---|
| Lump sum | Up to 60% | Up to 80% | Up to 60% |
| Annuity | At least 40% | At least 20% | At least 40% |
| Whole corpus as lump sum | If ₹5 lakh or less | If ₹8 lakh or less | If ₹8 lakh or less |
| Latest exit age | 75 | 85 | 85 |
Source: PFRDA's press release of 19 December 2025 on the amended Exits and Withdrawals regulations. For All Citizen subscribers, normal exit now also comes after 15 years in the scheme, even before 60.
A worked example
₹10,000 a month from 30 to 60, earning 10% a year, builds about ₹2.28 crore on ₹36 lakh invested. Taking the maximum 80% leaves ₹45.6 lakh for the annuity; at a 6% annuity rate that pays about ₹22,800 a month for life. Of the ₹1.82 crore lump sum, about ₹1.37 crore (60% of the corpus) is tax-free and ₹45.6 lakh is taxable. Annuitising more raises the pension and cuts the taxable lump sum: often the better trade for someone with no other pension.
Reading the result honestly
- Returns are assumptions. NPS invests in equity, corporate and government bonds; 10% is a long-run blended assumption, not a promise. Try 8% to see a cautious case.
- Annuity rates move with interest rates and depend on the option you choose (with or without return of the purchase price to your family). Get a quote before you exit.
- Inflation shrinks a pension fixed in rupees. Run the pension through the inflation calculator to see it in today's money.
Compare with the guaranteed EPF, or, for low-income workers outside the tax net, the fixed pension of Atal Pension Yojana. To draw down a lump sum gradually instead, see the SWP calculator.