How to claim an NPS account after the subscriber dies

The Permanent Retirement Account Number is on the PRAN card and on every NPS statement. With it you can identify the central recordkeeping agency and the nodal office through which the claim must go.

Establish the sector: government (central or state), corporate, or "all citizens" voluntary. The withdrawal rules on death differ between them, and applying under the wrong assumption leads to the claim being reworked.

Note also whether there was a Tier II account alongside Tier I. Tier II is a straightforward withdrawal and is often overlooked.

For a private or voluntary subscriber, the entire accumulated pension wealth is paid to the nominee or legal heirs — no annuity requirement and no threshold to clear.

PFRDA notified amendments to the exit regulations in 2025, aimed mainly at the non-government sector; the position below reflects PFRDA's current published guidance, but it is the kind of rule that moves, so confirm it with the nodal office before you plan around it.

For a government-sector subscriber the rule turns on a threshold. Where the accumulated pension wealth is ₹5 lakh or less, the whole amount can be paid to the nominee or legal heirs. Where it exceeds ₹5 lakh, at least 80 per cent must be applied to purchase an annuity for the surviving spouse, and the remaining 20 per cent is paid out.

Note what follows from taking the lump sum where that option exists: once exercised, the family's right to receive any further pension or annuity under NPS is extinguished. It is a one-time election, not a deferral.

Where an annuity is required, the family chooses an annuity service provider and an annuity variant, and that choice is effectively permanent. It is worth taking advice on the variant — whether the pension continues to children, whether the purchase price is returned — before signing.

The claim is made on the Form for Withdrawal by Claimant due to Death of Subscriber, published by the recordkeeping agency and submitted with the documents to the nodal office, which verifies and authorises it before the recordkeeping agency processes the payment.

Where there are multiple nominees, each share is paid in the registered proportion and each nominee generally submits their own documents. Two situations catch families out. If a nominee died before the subscriber, that nomination is void — so unless a fresh one was filed, the claim falls to the legal heirs. And where the heirs agree that one of them should receive the whole amount, the others must give a relinquishment deed on stamp paper with their KYC, and the claimant gives an indemnity bond accepting responsibility for claiming on everyone's behalf.

Where no valid nomination can be established at all, the corpus is paid against a legal heir certificate from the state revenue authorities or a succession certificate from a court.

Claims can often be initiated online by the nodal office, which is faster than a fully physical submission.

The lump sum received by a nominee on the death of the subscriber has generally been treated favourably, while annuity income in the spouse's hands is taxed as income when received.

Because the choice between a larger lump sum and a larger annuity has a tax consequence as well as a cash-flow one, this is a decision worth taking with a tax adviser rather than at the counter.