NPS Annuity After Death – What Happens to the Corpus? Question: “If an NPS subscriber dies, what happens to the accumulated amount? Will the nominee/legal heir get the full 100% corpus or is it compulsory to buy annuity? Also, is the amount received tax-free?” Answer: As per PFRDA (Exits & Withdrawals under NPS) Regulations, 2015 & amendments , the rules differ slightly depending on the type of NPS account. Let’s break it down: ✅ For Subscribers from Government Sector : If the accumulated corpus is up to ₹5 lakhs , the entire amount is paid as a lump sum to the nominee/legal heir. If the accumulated corpus is more than ₹5 lakhs , then: 80% of the corpus must be used to purchase a default annuity from an Annuity Service Provider (ASP). 20% of the corpus can be withdrawn as a lump sum . ✅ For Subscribers from All Citizen & Corporate Sector : In case of death, 100% of the accumulated corpus is payable to the nominee/legal heir as a lump sum . T...
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