Overseas Citizens of India can now subscribe to National Pension Scheme
30 October 2019
Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enroll for the National Pension Scheme (NPS) on a par with Non-Resident Indians.
PERFIDA issued a notification in this regard on 29 October specifying that an OCI may subscribe to the National Pension System, provided such person is eligible to invest as per the provisions of the PFRDA Act and the annuity/accumulated saving will be repatriable, subject to FEMA guidelines.
The NPS is governed and administered by PFRDA.
The notification is in line with the government notification of 17 October on Foreign Exchange Management (Non-debt Instruments) Rules 2019.
Contributions made towards NPS are eligible for an additional tax deduction under section 80CCD(1B) up to Rs50,000 which is over and above the Rs1,50,000 limit of deduction available under Sec 80CCD(1).
In the Union Budget 2019, the tax exemption limit for lumpsum withdrawal on exit/maturity from NPS has been increased from the present 40 per cent to 60 per cent under section 10(12A) of the I-T Act and the remaining 40 per cent of the corpus is already tax-exempt as it is mandatorily utilised for annuity purchase.
NPS was initially notified for central government employees joining service on or after 1 January 2004. It was subsequently adopted by almost all state governments for their employees. NPS was extended to all citizens of Indian on voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.
As of 26 October 2019, the total number of subscribers under NPS and Atal Pension Yojana has crossed 31.8 million and the assets under management (AUM) has grown to Rs3,79,758 crore. More than 6.6 million government employees have been enrolled under NPS and 1.92 million subscribers have subscribed to NPS in the private sector with 6,812 entities registered as corporates.
PFRDA has taken several initiatives towards increasing the pension coverage in the country. Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.