Nomination changed from a dead subscriber's NPS login is void: PFRDA's rule and the Regulation 32 traps after marriage
PFRDA's 20 Oct 2022 circular voids NPS nomination changes made after death using the subscriber's login. How Regulation 32 decides who is paid, and why marriage cancels old nominations.
Key points
- PFRDA's circular of 20 October 2022 says any NPS nomination change made after death using the deceased subscriber's login is invalid.
- Under Regulation 32(v) of the 2015 Exit Regulations, a nomination made before marriage is deemed invalid once the subscriber marries.
- Without a valid nomination the corpus goes to legal heirs, though government and corporate staff can fall back on their employer-record nominee.
Photo: Dietmar Rabich / Wikimedia Commons, CC BY-SA 4.0 (cropped). Representational image.
When a National Pension System (NPS) subscriber dies, the money in the account is paid to whoever the subscriber validly nominated. On 20 October 2022 the Pension Fund Regulatory and Development Authority (PFRDA) issued Circular PFRDA/2022/29/ASP-EXIT/02 to deal with a specific problem: relatives or others logging in with a dead subscriber's credentials and changing the nominee before lodging the death claim. The circular's answer is blunt. Any such change "shall be treated as invalid", and the claim is settled on the last valid nomination the subscriber made while alive.
That rule sits on top of Regulation 32 of the PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015, which carries 12 provisos on who may be a nominee and when an existing nomination quietly stops working. Two of them catch more families than any login misuse ever will: proviso (v), which voids a pre-marriage nomination on marriage, and proviso (vi), which voids a no-family nomination once the subscriber acquires a family.
The Scheme Explained
What the 20 October 2022 circular says
The circular, signed by PFRDA's Chief General Manager and addressed to "All NPS Stake Holders", opens with one sentence that governs everything after it: "Nomination can be made only by the subscriber." It then sets out 6 clarifications for nodal officers in the government and non-government sectors, Points of Presence (POPs) and the NPS Trust. The full text is on the PFRDA website.
In short: (1) a nomination change made after death through the deceased's login is invalid; (2) the last valid pre-death nomination is used; (3) where no valid nomination exists under Exit Regulation 3(c) or 4(c), the eligible corpus goes to legal heirs; (4) government and corporate subscribers can fall back on the employer-record nomination; (5) CRAs must build an interface for this, with the employer certifying the nomination; and (6) for unorganised sector (UOS) subscribers, post-death changes are void and the amount goes to legal heirs.
So if the last valid nomination, filed in 2019 for example, named a spouse at 100%, a post-death edit naming a sibling is disregarded and the spouse is paid.
The employer safety net under Regulation 32(xii)
Point 4 matters for the 2 employer-linked groups: government subscribers under Regulation 3(c) and corporate subscribers under Regulation 4(c). Where no valid NPS nomination exists, Regulation 32(xii) lets the nomination "existing in the records of such subscriber with his or her employer for the purpose of receiving other admissible terminal benefits" stand in as the NPS nomination. The employer must send a confirmation of that nomination to the NPS Trust or the central recordkeeping agency (CRA) when forwarding the claim, which the circular operationalises through a declaration in the CRA interface.
There is no such safety net for UOS subscribers: point 6 sends their invalid-nomination cases straight to legal heirs. For the general meaning of a nomination and how it differs from inheritance, see the nomination glossary entry.
Regulation 32: the 12 provisos that decide validity
The circular annexes Chapter VII of the 2015 Exit Regulations. Regulation 32 requires every subscriber, at the time of joining, to nominate one or more persons, and gives the nominee the right to receive the money "to the exclusion of all other persons". The validity tests are in its provisos.
| Proviso | Rule | Effect |
|---|---|---|
| (i) | A nominee who dies before the subscriber loses the right | Nomination for that share becomes void |
| (ii) | An alternate nominee named for that event takes over | Only if written into the nomination |
| (iii) | Subscriber may split the amount among nominees at discretion | Shares should add to 100% |
| (iv) | A subscriber with a family must nominate family members only | A friend or sibling nominee is invalid |
| (v) | Fresh nomination required on marriage | Pre-marriage nomination is deemed invalid |
| (vi) | No-family nomination lapses once a family is acquired | Must re-nominate within the family |
| (vii) | Guardian for a minor nominee may be a major family member | Optional appointment |
| (viii) | If no major family member, any person may be guardian | Subscriber's discretion |
| (ix) | Nomination may be modified by written notice | Effective from the date the intermediary receives it |
| (x) | Spouse who ceases to be entitled to maintenance drops out of the family | Unless the subscriber says otherwise in writing |
| (xi) | Female subscriber may exclude husband and his dependent parents by written notice | Reversible in writing |
| (xii) | Employer-record nomination substitutes for government and corporate subscribers | Employer must confirm |
Who counts as "family"
Explanation I to Regulation 32 defines family in 3 versions. For a male subscriber it means his legally wedded wife, his children (married or unmarried), his dependent parents, and his deceased son's widow and children. For a female subscriber it is her legally wedded husband, her children, her dependent parents, her husband's dependent parents, and her deceased son's widow and children. For a subscriber who does not identify as male or female, it is their legally wedded spouse, their children, their dependent parents, and their deceased son's widow and children.
Explanation II removes a child, or a deceased son's child, who has been adopted by another person where the adopter's personal law recognises the adoption. A sibling does not appear in any of the 3 lists, nor do non-dependent parents, so a married subscriber who nominated a brother at 100% holds a nomination that proviso (iv) makes invalid.
The marriage and new-family traps
Proviso (v) is the most common way a valid nomination dies without anyone noticing. A subscriber who opened an NPS account at 24, before marriage, and named a parent at 100% has that nomination "deemed to be invalid" on marriage. If they die at 35 without re-nominating, the claim is assessed as one with no valid nomination.
Proviso (vi) works the same way for a subscriber who had no family at the time of nominating. A nomination in favour of "any person or persons" is lawful when made, but it is "forthwith deemed to be invalid" once the subscriber acquires a family, and a fresh nomination in favour of family members is required. Combined with point 1 of the 2022 circular, this means a family cannot repair a lapsed nomination after death by logging in and editing it: the edit is void, and the case goes to legal heirs or, for government and corporate subscribers, to the employer-record nominee.
Tax on Withdrawal
The nomination decides who is paid; the Income-tax Act decides how much of the payment is exempt. PFRDA's power ends at the regulations, and Oquilia's rate data, last updated for the amendment notified on 19 December 2025, records that the two limits no longer match for non-government subscribers.
| Payment | PFRDA limit (non-government) | Income-tax exemption on record |
|---|---|---|
| Lump sum on normal exit | Up to 80% of corpus | Section 10(12A): up to 60% of the total amount payable on closure or opting out |
| Minimum annuity purchase | At least 20% | Annuity income is taxed as it is received |
| Partial withdrawal before exit | 25% of own contributions | Section 10(12B): 25% of own contributions |
| Government sector lump sum | Up to 60% | Section 10(12A): up to 60% |
| Small corpus (non-government) | 100% lump sum up to Rs 8 lakh | Check the 60% cap against the amount paid |
The single most important point in the table is the gap in the first row. A non-government subscriber can now withdraw 80% as a lump sum, but section 10(12A), as verified against the Income Tax Department's site on 21 September 2026, exempts the payment on closure or opting out only to the extent it does not exceed 60%. On a Rs 1 crore corpus, that leaves a Rs 20 lakh slice whose treatment does not follow from section 10(12A). Oquilia has not found a Finance Act amendment aligning the two, so we do not describe that slice as either exempt or taxable; confirm it with the Act text on incometax.gov.in or a chartered accountant before filing.
What this means for a death claim
Section 10(12A), as recorded in Oquilia's rate data, is framed around payments on closure of the account or on opting out. A death claim is paid to a nominee or legal heir, not to the subscriber, and Oquilia's rate data does not record a separate exemption rule for that case. We therefore do not state a tax treatment for death claims here. A nominee receiving a claim in the 2026-27 tax year should check the position under the Act before filing the return due in 2027, and should keep the CRA settlement letter, which shows the date and amount paid.
Annuity and the nominee
What a family receives from the minimum 20% (non-government) or 40% (government and NPS-Lite) annuity after the annuitant's death depends on the annuity option chosen at purchase, not on the NPS nomination. Under the new regime for 2025-26, slab rates run from nil up to Rs 4 lakh to 30% above Rs 24 lakh, with a section 87A rebate of up to Rs 60,000 for income up to Rs 12 lakh.
Worked Drawdown
The nomination question does not end at 60. Under Regulation 32, a nominee is entitled to moneys that "have so remained unpaid" at the subscriber's death. So any part of the corpus still inside NPS, including a balance left in systematic withdrawal, is paid on the nomination, while money already paid out to the subscriber's bank account follows the bank's nomination, the will, or succession law. The example below shows how large that NPS balance stays.
The assumptions
A non-government subscriber retires at 60 with a Rs 1 crore corpus. Under the 19 December 2025 amendment they buy an annuity with the minimum 20%, or Rs 20 lakh, and keep the 80% lump-sum entitlement, Rs 80 lakh, inside NPS on a systematic withdrawal, drawing Rs 8 lakh at the start of each year. We assume the remaining balance earns 7% a year; this is an illustrative assumption for arithmetic, not a forecast of NPS returns. The nomination on file splits the account 60% to the spouse and 40% to an adult child, as proviso (iii) allows.
| Year | Withdrawn (Rs) | Balance at year end (Rs) | Spouse's 60% (Rs) | Child's 40% (Rs) |
|---|---|---|---|---|
| 1 | 8,00,000 | 77,04,000 | 46,22,400 | 30,81,600 |
| 2 | 8,00,000 | 73,87,280 | 44,32,368 | 29,54,912 |
| 3 | 8,00,000 | 70,48,390 | 42,29,034 | 28,19,356 |
| 4 | 8,00,000 | 66,85,777 | 40,11,466 | 26,74,311 |
| 5 | 8,00,000 | 62,97,781 | 37,78,669 | 25,19,113 |
| 8 | 8,00,000 | 49,63,098 | 29,77,859 | 19,85,239 |
After 8 years and Rs 64 lakh of withdrawals, Rs 49.63 lakh is still inside NPS under these assumptions. If the subscriber dies at the end of year 8, that is the amount a valid nomination directs, Rs 29.78 lakh to the spouse and Rs 19.85 lakh to the child.
The same table with a broken nomination
Now assume the subscriber opened the account at 26, unmarried, and named a sibling at 100%. They married at 30 and never re-nominated. Under proviso (v) the sibling nomination became invalid on the wedding day, and under proviso (iv) a sibling could not have been nominated by a married subscriber anyway.
If this subscriber dies at the end of year 3 with Rs 70,48,390 in the account, the outcomes diverge by sector:
- All Citizen or unorganised sector: point 3 or 6 of the circular applies and the Rs 70.48 lakh goes to legal heirs, not to the sibling.
- Corporate sector under Regulation 4(c): if the employer's records hold a nomination for other terminal benefits, Regulation 32(xii) treats it as the NPS nomination, and the employer certifies it in the CRA interface.
- Government sector under Regulation 3(c): the same employer-record rule applies as for corporate subscribers.
- Any sector, edited after death: a relative replacing the sibling with the spouse after the death is voided by point 1.
Running your own numbers
Use the NPS calculator to project the corpus at 60, then the retirement drawdown calculator to see how fast a systematic withdrawal runs down at your own rate and withdrawal amount. The annuity vs SWP calculator compares the 20% annuity leg against keeping more money in a drawdown, which in turn changes how much your nomination controls. Background on the scheme itself is in the NPS glossary entry.
A 3-point nomination check
- If you have married since your last nomination, file a fresh one; proviso (v) has already voided the old one.
- Name an alternate for each nominee under proviso (ii), and a guardian for any minor under proviso (vii).
- Government and corporate staff should also check the employer's terminal-benefit nomination, since Regulation 32(xii) can fall back on it.
FAQ
Can my family change my NPS nominee after I die?
No. Point 1 of PFRDA Circular PFRDA/2022/29/ASP-EXIT/02 dated 20 October 2022 treats any post-death change made through the deceased's login as invalid. The last valid nomination made before death is used.
What happens if there is no valid nomination?
Under point 3 of the circular, cases under Exit Regulation 3(c) or 4(c) are paid to legal heirs. Government and corporate subscribers can first fall back on the employer-record nomination under Regulation 32(xii).
Does marriage cancel my NPS nomination?
Yes. Proviso (v) of Regulation 32 deems any nomination made before marriage invalid and requires a fresh one.
Can I nominate my brother or a friend?
Only if you have no family under Explanation I when you nominate. Proviso (iv) invalidates a non-family nominee for a subscriber with a family, and proviso (vi) voids a no-family nomination once a family is acquired.
Is the death claim paid to my nominee tax-free?
Oquilia's verified rate data records the section 10(12A) cap of 60% for closure or opting out and the section 10(12B) cap of 25% of own contributions for partial withdrawals, but no separate rule for death claims. Confirm against the Act on incometax.gov.in before filing.
When does a change of nominee take effect?
Under proviso (ix), from the date the intermediary or nodal office receives it, to the extent it is valid. A change received a day before death counts; one made after death does not.