Now OCIs can also subscribe to National Pension System

New Delhi: Overseas Citizens of India (OCI) will now be eligible to apply for the National Pension System at par with NRIs, the government said on Wednesday.

Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India (OCI) to enroll in NPS at par with Non-Resident Indians (NRIs) vide circular dated October 29, 2019, the Finance Ministry said in a release.

According to a notification by the Department of Economic Affairs on Foreign Exchange Management (Non-debt Instruments) Rules, 2019, the OCIs may subscribe to the National Pension System (NPS) which is being governed and administered by PFRDA.

Overseas Citizens of India willing to subscribe NPS should be eligible to invest as per the provisions of the PFRDA Act and the annuity/accumulated saving will be repatriable, subject to FEMA (Foreign Exchange Management Act) guidelines.

The 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 sec 80CCD (1).

In the Union Budget 2019, the tax exemption limit for lumpsum 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 utilized for annuity purchase.

PFRDA runs two pension schemes - NPS and Atal Pension Yojana - whereas the former caters to the government and organised sector employees, the latter is mainly for the workers in the unorganised sector.

As on October 26, 2019, the total number of subscribers under the NPS and Atal Pension Yojana has crossed 3.18 crore. The asset under management (AUM) stands at Rs 3,79,758 crore.

More than 66 lakhs government employees have been enrolled under the NPS and 19.2 lakhs subscribers in the private sector with 6,812 entities registered as corporates have been enrolled with the NPS.

PFRDA in its endeavor to promote and develop the NPS has taken several initiatives towards increasing the pension coverage in the country, the release said.

Now, any Indian citizen, resident or non-resident and OCIs are eligible to join the NPS till the age of 65 years, it added.

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.

It was extended to all Indian citizens on voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015.