On Tuesday, the Pension Fund Regulatory and Development Authority (PFRDA) issued a circular informing the addition of another category of investors to the National Pension System (NPS).
Overseas Citizen of India (OCI) category of individuals will now be permitted to invest in NPS. However, they cannot invest in Tier-II account of the retirement scheme.
"Considering the requests received from different sections, the Authority has decided to permit Overseas Citizen of India (OCI) to enrol in National Pension System at par with Non-Resident Indians (NRI) subscribing to NPS. However, the option of NPS Tier-II account will not be available for both NRI and OCI subscribers," the circular said.
Persons of Indian Origin (POI) category is still not allowed to invest in NPS. As for accumulated corpus, PFRDA said, "The annuity/accumulated saving will be repatriable'(Schedule III (4) of Foreign Exchange Management (Non-Debt Instruments) Rules, 2019."
As per the Indian laws, any foreign national, who was eligible to become a citizen of India on 26 January 1950 or was a citizen of India on or at any time after 26 January 1950 or belonged to a territory that became part of India after 15 August 1947 is eligible for registration as an OCI. Their minor children are also eligible for OCI. However, those who had ever been a citizen of Pakistan or Bangladesh, he/she will not be eligible for OCI.
In the NPS scheme, subscribers are compulsorily required to open a Tier-I account. Tier-II account is optional.
This retirement scheme comes with various tax and income-earning benefits. Apart from availing an additional Rs 50,000 tax benefit under section 80C, investors in NPS have the option to invest in equity, debt and other such market-linked instruments to help their retirement corpus grow.