KOLKATA: India has allowed non-residents (NRIs) to invest in the National Pension Scheme to provide them an access to old-age income security.
Reserve Bank of India on Thursday, 29th October 2015, allowed NRIs to subscribe to the pension scheme, which is governed and administered by the Pension Fund Regulatory and Development Authority.
RBI said the decision has been taken in consultation with the government, which under Prime Minister Narendra Modi is going all guns blazing to appease NRIs.
A lot of interest has been generated around the new scheme with the Union Budget 2015 giving additional tax benefits for investments up to Rs 50,000. However, there is no ceiling on the investment amount.
RBI said that investment has to be routed through normal banking channels. The subscription amounts should be paid by NRIs either by inward remittance through normal banking channels or out of funds held in their NRE/FCNR/NRO account. There will be no restriction on repatriation of the annuity or accumulated savings.
Minimum annual subscription under NPS is Rs 6,000 while allocation to equities is capped at 50% of investment.
NPS investments mature when the investor turns 60. If the corpus is less than Rs 2 lakh, the entire sum can be withdrawn. If it is more, the subscriber must put at least 40% of the corpus into an annuity to get a monthly pension.