The motive of the scheme is to ensure the financial stability of the elderly post-retirement by giving some percentage as a lump sum and rest in the form of pension after superannuation. NPS is managed by PFRDA or Pension Fund Regulatory and Development Authority, so one does not need to worry about the authenticity of the program. The scheme is open to all Indian citizens except for the people from the armed forces. NRI can invest in NPS too.Read more
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NRI or Non-Resident Indians are those individuals who reside outside of the Indian Territory, but they hold an Indian passport and are eligible for various schemes as other Indian citizens according to the guidelines of the government. The National Pension Scheme allows NRIs to invest in the scheme. But Persons of Indian Origin or PIO and Overseas Citizen of India or OCI are not permitted to invest in NPS. The difference between NRI and OCI is that NRI is an Indian citizen who lives outside of India, while OCI is a foreign citizen who has an Indian origin but is allowed to come to India any time for work, study, etc.
They are specific eligibility conditions that must be fulfilled by NRIs in order to invest in NPS. Here is the list of all eligibility criteria:
NRIs who meet all the above-mentioned eligibility criteria can now invest in the scheme. NRI can invest in NPS by following the given procedure:
Step 1: The first step for the interested NRIs is to either download the NRI NPS form from the official website of the banks that offer the NPS scheme or get the form from the bank's branch.
Step 2: Now it is time to fill up the form with all the necessary details. Make sure everything is accurate in order to avoid any inconvenience at later stages.
Step 3: Submit all the required documents asked by the bank.
Step 4: Once submitted, the bank will now verify all your documents and forward the form to the Central Record Keeping Agency or CRA.
Step 5: Pay the first deposit through cheque and remember the minimum amount for account opening is rupees 500. After the first payment via cheque, subsequent payments can be made online.
Step 6: After paying the first payment, NRI will receive the receipt of the same, and the application is now digitised.
Step 7: At last, the Central Record Agency will provide a 12-digit unique code to the NRI known as PRAN. Its full form is Permanent Retirement Account Number. The unique code will be provided through email or SMS.
The pension scheme is designed to financially empower retired individuals by providing various features that make the scheme flexible and secure. Let's walk through all the promising features of the NPS scheme:
The scheme NPS for NRI has several advantages if one decides to invest in it. Great market returns and the facility of premature withdrawal makes it one of the most attractive pension schemes in the market. Here is the list of all the benefits that come with the NPS:
There are a lot of banks and financial institutions in the country that offer NPS for NRI. Here is the list of some popular institutions where an investor can go and invest in the scheme.
NPS is a very flexible and investor-friendly scheme. It not only allows the investors to choose the fund manager of their choice but also gives them the option to allocate their funds based on their convenience. Investors can opt for any of the one options out of the given two, i.e., Active choice and Auto choice.
If investors opt for Active choice, they can allocate their funds in three different venues. The venues are E, C, and G Asset Classes. Investors will be required to tell the fund manager how much of their funds will go in different asset classes.
If an investor decides to go for option two, i.e., Auto choice, this is a lifecycle fund. The funds will be allocated to different venues as per the lifecycle matrix and considering the investor's age. Investors can choose the fund manager of their choice.
As we already know, NRI can invest in NPS and will get all the benefits like other Indian citizens. Other than providing higher returns and flexible investment options, NPS also helps an investor save some taxes. The tax benefits under NPS are available to both salaried and self-employed investors.
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*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.
**Tax benefit is subject to changes in tax laws.