Is money withdrawn from National Pension System (NPS) taxable?
- Rajesh Kumar Agrawal
The money you are withdrawing from NPS would be added to your income and taxed as per the Income Tax slab applicable to you. The annuity income received from life insurance companies would also be treated as income and taxed as per the Income Tax slab applicable to you.
If you are withdrawing money from National Pension Scheme (NPS) after you have reached 60 years, you can withdraw 60 per cent of the accumulated corpus. You should use at least 40 per cent of the accumulated fund to buy an annuity from a life insurance company to secure a monthly pension. If you are withdrawing the money before you are 60 years, you have to use at least 80 per cent of the accumulated funds to buy and annuity. You can withdraw only the balance amount.
This article was originally published on February 10, 2016.
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