Overseas Citizens Of India Can Also Subscribe To National Pension System Now
Overseas Citizens of India will now be eligible to apply for the National Pension System at par with Non-Resident Indians, the government said on Wednesday.
The Pension Fund Regulatory and Development Authority has now permitted OCIs to enroll in NPS at par with NRIs vide circular dated Oct. 29, 2019, the finance ministry said in a release.
According to a notification by Department of Economic Affairs on Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, the OCIs may subscribe to NPS, governed and administered by PFRDA.
Overseas Citizens of India willing to subscribe NPS should be eligible to invest as per the provisions of the PFRDA Act, 2013, and the annuity/accumulated saving will be repatriable, subject to guidelines under the Foreign Exchange Management Act, 1999.
The contributions made towards the NPS are eligible for an additional tax deduction under Section 80CCD (1B) up to Rs 50,000 which is over and above the Rs 1,50,000 limit of deduction available under Section 80CCD (1).
In the Union Budget 2019-20, the tax exemption limit for lump-sum withdrawal on exit/maturity from the NPS was increased from the present 40 percent to 60 percent under Section 10 (12A) of the Income Tax Act, 1961, and the remaining 40 percent of the corpus is already tax exempt as it is mandatorily utilised for annuity purchase.
PFRDA runs two pension schemes—National Pension System and Atal Pension Yojana. While the the former caters to the government and organised sector employees, the latter is mainly for the workers in the unorganised sector.
As on Oct. 26, 2019, the total number of subscribers under the NPS and Atal Pension Yojana schemes has crossed 3.18 crore. Total assets under management stands at Rs 3,79,758 crore.
More than 66 lakh government employees have been enrolled under the NPS. Almost 19.2 lakh subscribers in the private sector, with 6,812 entities registered as corporates, have been enrolled with the NPS.
PFRDA in its endeavour to promote and develop the NPS has taken several initiatives towards increasing the pension coverage in the country, the release said. Now, every Indian citizen, including NRIs and OCIs, are eligible to join the NPS till the age of 65 years, it added.
NPS was initially notified for central government employees joining service on or after Jan. 1, 2004, and subsequently adopted by almost all state governments for their employees. It was extended to all Indian citizens on voluntary basis from May 2009, corporates in December 2011 and NRIs in October 2015.