Budget 2017: Partial withdrawal from NPS not to be taxed

The upper limit of contribution to NPS by self-employed raised from 10-20% of gross total income

The government has clarified in the Budget that no tax will be levied on partial withdrawal not exceeding 25% of contribution from the National Pension System (NPS). It has also taken steps to bring about parity between employees and self-employed in the matter of deduction enjoyed on contribution to NPS.    

"Earlier, there was no clarity on how withdrawals made during the accumulation phase would be taxed. Now, the government has said there will be no tax on withdrawal of up to 25% of contribution," says Manoj Nagpal, chief executive officer, Outlook Asia Capital.    

Withdrawals from NPS