Overseas Citizens of India can now enroll in NPS at par with NRIs, announces PFRDA

Overseas Citizen of India (OCI) can now enroll in the National Pension Scheme (NPS) at par with non-resident Indians (NRIs), the Pension Fund Regulatory and Development Authority (PFRDA) announced on Wednesday.

“An OCI may subscribe to the National Pension System governed and administered by PFRDA, 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

NPS contributions come with tax benefits. 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 150,000 limit of deduction available under sec 80CCD(1).

Furthermore, finance minister Nirmala Sitharaman’s maiden Union Budget in July raised the tax exemption limit for lumpsum withdrawal to 60 percent from the earlier 40 percent.

“In the Union Budget 2019, the tax exemption limit for lumpsum withdrawal on exit/maturity from NPS has been increased from the present 40 percent to 60 percent under section 10(12A) of the IT Act and the remaining 40 percent of the corpus is already tax-exempt as it is mandatorily utilized for annuity purchase,” the PFRDA release noted.