An Overseas Citizen of India can enrol for the National Pension Scheme (NPS) now. The pension regulator, Pension Fund Regulatory and Development Authority (PFRDA), has approved for that.
With this, OCI will be on par with non-resident Indians (NRIs). According to an official statement, such persons are eligible to invest in pension schemes, and the annuity/accumulated savings will be repatriable, subject to FEMA (Foreign Exchange Management Act) guidelines.
NPS is a voluntary and contributory pension scheme. Contributions made towards NPS are eligible for an additional tax deduction up to ₹50,000 which is over and above the ₹1,50,000 limit of deduction available under Income Tax Act. Last year, the Union Budget made the scheme more attractive as tax exemption limit for lump-sum withdrawal on exit/maturity from NPS increased to 60 per cent from 40 per cent of the total corpus in the scheme. With this, the scheme enjoys ‘EEE’ status, which means exemption from tax at the time of deposit, exemption on accumulation and full exemption at the time of withdrawal.
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. NPS was extended to all citizens of Indian origin 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 NPS and Atal Pension Yojana has crossed 3.18 crore, and the Asset under Management (AUM) has grown to ₹3,79,758 crore. More than 66 lakh government employees have been enrolled under NPS and 19.2 lakh NPS subscribers are from the private sector with 6,812 entities registered as corporates. Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65 years.
Who is OCI?
OCI is an immigration status for long term stay and works in India. A foreign national who was a citizen of India at the time of, or at any time after 26th January, 1950, or who was eligible to become a citizen of India on 26th January, 1950, or who belonged to a territory that became part of India after 15th August, 1947, or who is a child or a grandchild or a great-grandchild of such a citizen, or who is a minor child of such persons mentioned above, or who is a minor child and whose both parents are citizens of India or one of the parents is a citizen of India - is eligible for registration as OCI cardholder.
Besides, spouse of foreign origin of a citizen of India or spouse of foreign origin of an OCI cardholder and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application is also eligible for registration as OCI cardholder. However, no person, who or either of whose parents or grandparents or great grandparents is or had been a citizen of Pakistan, Bangladesh or such other country, specified by the Centre will be eligible for registration as an Overseas Citizen of India cardholder.