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NPS subscriptions now available for overseas Indian citizens


NPS subscriptions now available for overseas Indian citizens

The NPS (National Pension Scheme) is always perceived as a safe and reliable investment option for the future. The National Pension Scheme was notified from the 1st of January, 2004, for all government employees who joined their service from this date. It was extended later on for all Indian citizens from May, 2009, on the voluntary basis.

As per the latest developments related to the NPS (National Pension Scheme), overseas Indian citizens will now be allowed to enroll in the scheme in the same way as resident Indian citizens. This notification has already been issued officially by the PFRDA or Pension Fund Regulatory and Development Authority.

Key details about NPS enrollment for overseas Indian citizens

The Government has released its circular, stating that any citizen of India, either non-resident or resident and also the OCIs will have eligibility to join the National Pension Scheme until he/she reaches 65 years of age. The present criteria for joining the National Pension Scheme will be applicable in case of overseas Indian citizens. OCIs can also repatriate their accumulated money through savings or even annuities on the basis of guidelines issued by FEMA.

The Central Government has already taken a pro-active measure in the last Union Budget by announcing the increase in the threshold for tax exemptions upon the maturity of NPS or withdrawals/exits. This threshold for tax exemption has been raised to 60% from 40% earlier. The remainder of the 40% invested by the individual will be compulsorily received in the form of an annuity which is anyway exempted from taxes.

Vital points worth noting

  • The Department of Economic Affairs on Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 has released the notification.
  • This states that OCIs can enter into subscriptions for the NPS which is administered and regulated by the PFRDA.
  • Overseas citizens of India (OCIs) should have eligibility based on the guidelines released by the PFRDA and the accumulated savings/annuity will naturally be repatriable.
  • NPS (National Pension Scheme) contributions are eligible for extra tax exemptions up to Rs. 50,000 under Section 80CCD (1B). This is over and above the maximum deduction limit of Rs. 1,50,000 under Section 80CCD (1).
  • The tax exemption limit has been raised for withdrawal of the lump-sum amount as mentioned, under Section 10 (12A) of the IT Act.
  • As of the 26th of October, 2019, the total subscriber count under Atal Pension Yojana and NPS has already surpassed 3.18 crore people.
  • AUM (assets under management) now stands at Rs. 3,79,758 crore for the NPS.
  • 66 lakh+ government employees have joined the NPS and 19.2 lakh people have subscribed from the private sector.
  • 6,812 organizations with corporate registration have also enrolled for the NPS till date.
  • PFRDA has come up with several measures for scaling up overall pension coverage in India as per the official statement.
  • Any Indian citizen, irrespective of residential status can now join up to the age of 65 years.
  • NPS was notified initially for employees of the central government who joined service on or post 1st January, 2004. Later on, it was adopted by almost all Indian State Governments for their employees.
  • After being extended for all citizens of India (voluntary basis) from May, 2009, as stated earlier, it was extended in December, 2011, for corporate entities.
  • NPS was also extended for Non-Resident Indians in October, 2015.

This new move to enable NPS enrollment for overseas citizens of India (OCIs) should definitely be a positive step towards scaling up overall pension coverage throughout the country as per several experts. The increase in the tax exemption limit for withdrawal of the lump sum portion has also made this investment avenue more attractive to individual citizens and corporates alike.


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