NPS scheme for NRIs: How can non-resident Indians contribute, and invest in National Pension System
NPS scheme for NRIs: Non-resident Indians (NRIs) aged 18 to 60 can invest in India's National Pension Scheme (NPS) by adhering to KYC norms. The NRIs can make contributions to NPS from their NRO/NRE account. NPS offers diversification across financial securities and asset classes (Equity, Corporate Bonds, Government Securities). NRIs can choose their investment mix based on risk appetite. There are two fund management schemes: Active Choice and Auto Choice, catering to individual preferences.
Nirav R Karkera (Head — Research, Fisdom) said that an NRI can invest only in the mandatory Tier-I option of NPS. “While various intermediaries offer easy access to the product, an NRI can simply register through the e-NPS website portal as well," said Karkera
The process would be fairly straightforward while registering with Aadhar, added Karkera.
Tier-I is a non-withdrawable retirement account that can be withdrawn only upon meeting the exit conditions prescribed under NPS.
The NPS has a minimum account opening contribution of ₹500, a minimum per contribution of ₹500, and a minimum annual contribution of ₹6,000, said Amit Gupta, MD, SAG Infotech.
Contribution to NPS qualifies for tax deduction under section 80CCD(1) up to 205 of gross total income or 1.5 lakh whichever is lower (deduction under section 80C, 80CCC shall also be subsumed within the 1.5 lakh limit), said Divakar Vijayasarathy, Founder, CEO, DVS Advisors
Additionally, subscribers are also allowed a deduction in addition to the deduction already allowed under Section 80CCD(1) for contribution to the NPS account, subject to a maximum of ₹50, 000 under Section 80CCD(1B) of IT Act, 1961. This is an additional deduction if the 1.5 lakh limit is already exhausted, added
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