Pension regulator Pension Fund Regulatory Development Authority (PFRDA) has now permitted Overseas Citizens of India, known as OCIs, to enroll in NPS (National Pension System) at par with Non-Resident Indians (NRIs).
A registered Overseas Citizen of India is granted multiple entry, multi purpose, life-long visa for visiting India, he/she is exempted from registration with Foreign Regional Registration Officer or Foreign Registration Officer for any length of stay in India, An OCI is entitled to general ‘parity with NRIs in respect of all facilities available to them in economic, financial and educational fields except in matters relating to the acquisition of agricultural or plantation properties’.
A government notification said that the Pension Fund Regulatory and Development Authority (PFRDA) has allowed this via circular number PFRDA/2019/19/PDES/3 dated 29th October 2019.
With the latest development, any Indian citizen, resident or non-resident, and OCIs are eligible to join NPS till the age of 65 years.
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 guidelines.
Contributions made towards 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 sec 80CCD(1).
In the Union Budget 2019, the tax exemption limit for lump sum withdrawal on exit/maturity from NPS has been increased from the present 40% to 60% under section 10(12A) of the IT Act and the remaining 40% of the corpus is already tax-exempt as it is mandatorily utilized for annuity purchase.
NPS was initially notified for central government employees joining service on or after 1st Jan 2004 and subsequently adopted by almost all State Governments for its employees. NPS was extended to all citizens of Indian on a voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.
As of 26th October 2019, the total number of subscribers under NPS and Atal Pension Yojana has crossed 3.18 crore and the Asset under Management (AUM) has grown to Rs. 3,79,758 crore. More than 66 lakh government employees have been enrolled under NPS and 19.2 lakh subscribers have subscribed to NPS in the private sector with 6,812 entities registered as corporates.