The Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enrol in the National Pension System (NPS) at par with Non-Resident Indians
The Government has specified that an OCI may subscribe to the National Pension System governed and administered by the 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 the FEMA guidelines, the Finance Ministry said.
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, the tax exemption limit for lump sum withdrawal on exit/maturity from the NPS has been increased from the present 40 per cent to 60 per cent under section 10(12A) of the IT Act and the remaining 40 per cent of the corpus is already tax-exempt as it is mandatorily utilised for annuity purchase.
The PFRDA is the statutory authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of the NPS and the pension schemes to which this Act applies.
The NPS was initially notified for Central government employees joining service on or after January 1, 2004 and subsequently adopted by almost all State Governments for its employees. The NPS was extended to all citizens of India on a voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.
As on October 26, 2019, the total number of subscribers under the NPS and Atal Pension Yojana has crossed 3.18 crores and the Asset under Management (AUM) has grown to Rs 3,79,758 crores. More than 66 lakh government employees have been enrolled under the NPS and 19.2 lakh subscribers have subscribed to the NPS in the private sector with 6,812 entities registered as corporations.
The PFRDA in its endeavour to promote and develop the NPS has taken several initiatives towards increasing the pension coverage in the country. Now, any Indian citizen, resident or non-resident and OCIs are eligible to join the NPS till the age of 65 years.