The annuity payable by the annuity service providers or ASPs to the NRIs and OCIs is legally responsible for the deduction of tax at the applicable rate as per the Double Taxation Avoidance Agreement (DTAA) of the country where in the OCI or the NRI resides, clarifies PERDA on the deduction of TDS.
The PERDA said that, on the basis of the communication which has been received from Insurance Regulatory and Development Authority of India (IRDAI), it has been clarified that taxes will me marked at the source to the annuity payable by the ASPs to NRIs and OCIs.
The rates will be applicable based on the Double Taxation Avoidance Agreements(DTAA ) of the country where the annuitant resides. The overseas citizens of India (OCI) have been allowed to subscribe to National Pension Scheme (NPS) with the NRIs, in 2019.
Further, the intermediaries which included ASPs were directed by the pension fund regulatory body. The intermediaries were used to display or communicate to current as well as prospective NPS subscribers that “Annuitanties payable to NRI/OCI are subject to TDS’ and repatriation of the corpus, if any will be subject to applicable laws and regulatory provisions of IRDAI/PFRDA/RBI,” on their websites, brochers that help in publicizing.
