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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.
The Pension Fund Regulatory and Development Authority (PFRDA) has now permitted Overseas Citizen of India to enrol in NPS at par with non-resident Indians (NRIs) vide circular dated October 29, 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 NPS which is being governed and administered by PFRDA.
OCI 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.
Eligible for tax deduction
The contributions made towards the NPS are eligible for an additional tax deduction under section 80CCD (1B) up to ₹50,000 which is over and above the ₹1,50,000 limit of deduction available under section 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 utilised for annuity purchase.
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