Now Reading: NRIs Can Invest in NPS, But Tier II Accounts Are Barred
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NRIs Can Invest in NPS, But Tier II Accounts Are Barred
Non-Resident Indians and Overseas Citizens of India can invest in India’s National Pension System, while Persons of Indian Origin cannot, according to the Economic Times. Eligible subscribers must be Indian citizens aged…
The Story in Brief
Non-Resident Indians and Overseas Citizens of India can invest in India’s National Pension System, while Persons of Indian Origin cannot, according to the Economic Times. Eligible subscribers must be Indian citizens aged 18 to 70 when joining, complete KYC checks and contribute through an NRE or NRO bank account.
NRIs can open Tier I accounts, the retirement-focused option with restricted withdrawals, but cannot open Tier II accounts. Under the old tax regime, Indian income can qualify for deductions of up to Rs 1.5 lakh under Section 80C and Rs 50,000 under Section 80CCD(1B). At 60, up to 60% of the corpus can be withdrawn tax-free in India, while the balance buys an annuity whose income is taxable.
The Indian Opinion
The lazy claim that NRIs are shut out of India’s pension system is wrong. So is the opposite pitch that NPS withdrawals are entirely tax-free. The benefit depends on Indian taxable income, the old tax regime and the withdrawal route. Annuity income remains taxable in India, and the subscriber’s country of residence may impose its own rules. The practical test is simple: compare the post-tax annuity and lump sum after both countries’ tax treatment.
Source: economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
