National Pension Scheme NRI

National Pension Scheme NRI Eligibility

To open an NPS account as a Non-Resident Indian (NRI), the following eligibility conditions must be met:

• The applicant must be an NRI (Non-Resident Indian).
• Age must be between 18 to 70 years at the time of application.
• Must comply with all applicable KYC (Know Your Customer) norms.
• PIOs (Persons of Indian Origin) and OCIs (Overseas Citizens of India) are not eligible to invest in NPS.

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60%

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Features of the National Pension Scheme for NRIs

1. Investment Choices

   • Diversified Portfolio: Investments are spread across various financial instruments to reduce risk.
   • Balanced Asset Mix: Contributions are allocated among Equity (E), Corporate Bonds (C), and Government Securities (G), ensuring stability even during market fluctuations.
   • Customisable Investment: NRIs can choose their own asset allocation based on personal risk appetite.

2. Fund Management Options

   • Active Choice: NRIs decide the proportion of investments in E, C, and G.
   • Auto Choice: Default option where fund allocation is managed automatically based on the subscriber’s age, adjusting risk as you grow older.

Contribution Rules for NPS NRI Account

NRIs can start investing in the National Pension Scheme with simple and affordable contributions. The key contribution rules are:

• Minimum Contribution at Account Opening: ₹500
• Minimum Amount per Contribution: ₹500
• Minimum Annual Contribution: ₹6,000

There is no upper limit on the contribution amount, offering flexibility to invest as per your financial goals and retirement plans.

How to Open a National Pension Scheme NRI Account: Step-by-Step Guide

Opening an NPS account for NRIs is a simple online process. Follow these steps to register and start investing in your retirement from anywhere in the world:

Step 1: Visit the Official Portal

• Go to the PFRDA/NPS Trust website.
• Click the “eNPS” section.
• Select the “Registration” button and choose “New Registration”.

Step 2: Select NRI Account Type

• Choose ‘Non-Resident Indian (NRI)’ as the applicant category.
• Select the account type: Repatriable or Non-Repatriable.
• Opt to register using Aadhaar for quick verification.

Step 3: Enter Identification Details

• For Repatriable accounts, enter your Passport Number and Aadhaar Number, then click Generate OTP.
• Enter the OTP received on your Aadhaar-linked mobile number, then click Continue.

Step 4: Provide Bank Account Details

• Repatriable Accounts:
  Select your bank from the list of empanelled banks for verification and submit NRE/NRO account details.
• Non-Repatriable Accounts:
  Provide bank details of any Indian account and submit NRE/NRO account details on a self-declaration basis.

Step 5: Aadhaar-Based Autofill

• Your demographic details and photographs will be automatically fetched from the Aadhaar database and filled out on the form.

Step 6: Complete the Registration

• Fill in all the remaining mandatory fields across the various tabs to complete the registration process.

Once successfully registered, your PRAN (Permanent Retirement Account Number) will be generated, and you can start managing your NPS account online.

Exit & Withdrawal Rules for NPS NRI Account

• At Age 60:
  • A minimum of 40% of the corpus must be used to purchase an annuity plan.
  • Up to 60% can be withdrawn as a lump sum.
  • If the corpus is less than ₹2 lakh, full withdrawal is allowed.
  • Subscribers can continue investing until age 70, with fresh contributions allowed.
  • Withdrawal or annuity purchase can be deferred up to 3 years after exit.
• Before Age 60:
  • Minimum 80% must be annuitised.
  • Maximum 20% can be withdrawn as a lump sum.
  • If the corpus is less than ₹1 lakh, full withdrawal is allowed.
• On Subscriber’s Death:
  • The nominee can claim 100% of the NPS corpus as a lump sum.

NPS Tax Benefits for NRIs (Non-Resident Indians)

If you're an NRI earning income in India, you can save tax by investing in the National Pension Scheme (NPS). Although NRIs are not eligible for employer contributions, you can still claim tax deductions under the following two sections of the Income Tax Act:

1. Section 80CCD(1): Deduction for Your Own Contribution

   This section helps you save tax on the amount you invest in your NPS account.

   Who can claim it?

   Any NRI who has a Tier I NPS account and earns taxable income in India

   How much tax can you save?

   • NRIs and self-employed: Deduction up to 20% of gross total income, capped at ₹1.5 lakh under Section 80C.
   • Salaried individuals (including NRIs earning a salary in India): Deduction up to 10% of salary (Basic + DA), also within the ₹1.5 lakh limit.

    Example:

   • Robin is an NRI with an income in India of ₹10,00,000 per year
   • He contributes ₹1,00,000 to his NPS account
   • 10% of ₹10,00,000 = ₹1,00,000
   • Robin can claim ₹1,00,000 as tax deduction under Section 80CCD(1)
   • This amount is counted under the overall ₹1.5 lakh limit 

2. Section 80CCD(1B): Extra Deduction Over and Above 80CCD(1)

   If you want to save more tax beyond the ₹1.5 lakh 80C limit, this section helps.

   Who can claim it?

   • Any NRI who contributes extra to their NPS account

   How much extra deduction?

   • You can claim ₹50,000 more as a tax deduction
   • This is separate from the ₹1.5 lakh limit under Section 80CCD(1)

   Example:

   • Robin has already claimed ₹1.5 lakh under 80CCD(1) (₹1 lakh in NPS and ₹50,000 in LIC)
   • He contributes another ₹50,000 to his NPS account voluntarily
   • Robin can claim ₹50,000 more under Section 80CCD(1B)
   • His total tax deduction becomes ₹2 lakh (₹1.5 lakh + ₹50,000)

Conclusion

The National Pension Scheme NRI is a low-cost, tax-saving, and professionally managed investment plan. With features like flexible contributions, location-agnostic access, and high NPS interest rates, it is one of the best options for NRIs to secure their retirement years.