While there have been consistent roadblocks for the overseas citizens from investing in the pension schemes, the same has changed now. With the new laws passed, the Overseas Citizen of India can now invest into NPS or the National Pension Scheme Tier 1 scheme.
In an issued notification, retirement fund body PFRDA stated saying, “Considering the requests from different sections, the authority has decided to permit Overseas Citizen of India (OCI) to enroll in NPS at par with non-resident Indians (NRIs) subscribing to NPS.”
But, the same doesn’t apply to the NPS Tier II accounts which is not accessible for the NRIs as well as the OCIs too.
According to the website of the Ministry of External Affairs, it says, “The Scheme (Overseas Citizenship of India Scheme) provides for registration as Overseas Citizen of India (OCI) of all Persons of Indian Origin (PIOs) who were citizens of India on 26th January, 1950 or there after or were eligible to become citizens of India on 26th January, 1950 except who is or had been a citizen of Pakistan, Bangladesh or such other country as the Central Government may, by notification in the Official Gazette, specify.”
The experts in this domain have further welcomed the move to help the Overseas Citizens of India to be able to successfully invest in NPS. The NPS Tier 1 was previously only accessible to the NRIs but the same has now been changed and modified to allow access to the OCIs too. This is effective for the individuals who have their origin in India but have taken up foreign citizenship while working in the said nation. This is good for the people who want to continue with their investments in India with their local acquirements.
Alok Agarwal, who is a partner at Deloitte India further emphasised saying that there are some OCIs who have already come back to India permanently, while consistently maintaining their foreign citizenships. Since these individuals didn’t have their Indian citizenship, they couldn’t qualify as NRIs too.
This relaxation is going to come in handy for such OCIs who will be able to take advantage of the NPS investment along with the income tax benefits that come along with it.
Under NPS, the collected and invested money is collected in a pension fund which comes in two different prospects, the Tier-1 which allows the pension account and provides with tax benefits and the tier – II which allows the optional benefits of withdrawal of the pooled money.
