NEW DELHI: Pension Fund Regulatory and Development Authority (PFRDA) has allowed people of Indian origin holding citizenship of other countries to invest in National Pension Scheme (NPS), at par with Non-Resident Indians.“…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 guidelines,” the finance ministry said.
The NPS is a government -run pension and investment scheme aimed at providing old age security through safe and regulated market-based return.PFRDA regulates the scheme. With the latest addition, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.NPS contributions are eligible for an additional tax deduction up to `50,000. This is over and above the `1,50,000 limit of deduction available under sec 80CCD (1) or tax deductions available to individuals who make contributions under NPS.
Besides, in the Union Budget, the government increased the income tax exemption limit on withdrawal from NPS to 60 per cent, from 40 per cent, on exiting the scheme, effectively making withdrawal from the pension scheme 100 per cent tax-free.
“This is a welcome move for OCIs as there are many individuals of Indian origin who have taken up foreign citizenship while working overseas and may prefer to continue investing in India from their local income sources,” Alok Agrawal, Partner, Deloitte India said. As of October 26, total number of subscribers under NPS and Atal Pension Yojana has crossed 3.18 crores.