If you are a Non-Resident India (NRI), and wish to have an account in the National Pension Scheme, then there is good news for you. NRIs are eligible to open an NPS account provided they fulfil certain eligibility conditions like age and provide proper documentation.The NPS for NRIs provide them all the benefits of the scheme, just like for resident Indian citizens. Before knowing the eligibility conditions and the steps to register for the National Pension Scheme, you must understand the basic and key features of the NPS.
Understanding the features of the NPS scheme:
1. What is the NPS?
Implemented on May 1, 2009, the National Pension Scheme (NPS) is a government-sponsored pension scheme. One of the key benefits of the NPS is that it acts as an investment and pension plan by providing income along with market-based returns. This social security initiative of the union government is open to employees from the public sector, private sector and unorganised sector. Personnel and officers of the armed forces, however, are not allowed to participate in the scheme. It encourages people from all the three sectors to invest in their pension account at regular intervals. After retirement, the subscriber can withdraw a certain amount from the corpus, and avail the remaining amount as monthly pension.
2. What is PRAN?
The National Pension Scheme is based on unique Permanent Retirement Account Number (PRAN) which is allotted to every subscriber for NPS. The scheme is regulated and managed by the Pension Fund Regulatory and Development Authority (PFRDA).
3. What are the key benefits of the NPS?
Two crucial benefits of the NPS, include the scheme being portable across jobs and locations and providing tax benefits under Sections 80C and 80CCD(1)of the Income Tax Act. The PFRDA has made this scheme open to all Indian citizens, and NRIs, between 18 and 65 years on a voluntary basis.
4. What are POPS?
Points of Presence (POPs) are the first point of interaction of NPS subscribers with the NPS scheme. Authorised branches of any POP, called POP-subscribers (POP-SP) are the collection point for the subscribers, and they provide the subscribers with a range of customer services, including withdrawal requests from NPS. The locations of POPs can be accessed through the website of PFRDA.
NPS for NRIs, eligibility conditions: As an NRI, you must fulfil certain eligibility criteria for having an NPS account. Your age must be between 18 and 60 years, and you should have a PAN card alongside a bank account in an NPS empanelled bank for KYC verification.
Steps to open an NPS account for NRIs:
1. You can visit the PFRDAs NPS website and select e-NPS. Then select new registration to start the process for registration. For offline registration, you can download the NPS form from the website of PFRDA, National Securities Depository Limited’s (NSDLs) e-gov website or the website of any empaneled bank.
2. After selecting the NRI option, you must select the type of accounts, either Repatriable (NRE) or Non-Repatriable (NRO). Then you have to provide the details of your PAN, passport and bank account. After selecting the country of residence, the website will display a NPS registration form.
3. You must then enter your personal details like name, age, contact number and bank account details. You are also required to select the pension fund manager and investment mode. There are two options for investment, the Active Mode and Auto Mode. While allocations in various funds are allocated automatically in the Auto Mode, you need to fill-in the percentage allocation in different asset classes in the Active Mode. Then you have to upload a scanned signature and photograph in the requisite format. The process of NPS for NRIs then mandates an initial contribution of Rs 500 through your NPS empaneled bank.
4. After completing the registration process, you must print the system-generated form and fill it by adding your signature and pasting photographs. The form has then to be sent to the Central Recordkeeping Agency (CRA) of NPS within 90 days. This is the last step for having an NPS account for NRIs.
5. The CRA then generates a PRAN. Subsequently, you are intimidated about your PRAN through SMS and email. You can then start making regular contributions in your NPS account.
NRIs are eligible to invest in the National Pension Scheme, just like resident Indians. The additional tax benefit on NPS is also available to NRIs. To invest in the NPS, the NRI will have to go through the basic KYC process and should be between 18 and 60 years of age to be eligible.
If you are an NRI, then, you can easily avail of the NPS for NRIs on Finserv MARKETS, which provides you with considerable flexibility to switch between investment plans and fund managers. The key feature of the NPS here is the complete transparency. As the process is completely paperless, you need not hold onto documents or receipts certifying the investment made. Additionally, the NPS account, as created through Finserv MARKETS, can be accessed from anywhere, providing you with added convenience.
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