NPS for NRIs: How to open an account, how to invest, documents required and more

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Individuals can subscribe to the NPS and make recurring contributions towards their retirement. Post-retirement, they can take a portion of the corpus and invest the remainder in an annuity, which will provide them with a steady income. Investors can also get tax benefits for investing in NPS. Can NRIs invest in it?

Non-Resident Indians (NRIs) can open National Pension System (NPS) accounts that are complying with the extant KYC norms. Do note that NRI cannot open a joint account in NPS.

Documents required for opening an NPS account

To open an NPS account, investors must submit the following documentation
A completed subscriber registration form
A copy of your passport;
Proof of address, if your local address differs from the address on your passport.

Where will the funds contributed by NRIs in NPS be invested?
Under the NPS All Citizen model, NRIs have the option of selecting a pension fund management and exercising their investment options. The fund is invested in various classes of securities by the appointed pension fund management, as per the Pension Fund Regulatory and Development Authority’s (PFRDA) investing criteria.

According to the NRI FAQ, “The investment is usually in equity(E), corporate bonds (C), and/or government securities (G). The individual subscriber has a choice of selecting an investment mix (E, C, G), as per his/her risk appetite.”

In what form can the contribution be made i.e. foreign exchange or Indian currency?
NRI contributions can be made from any of the following sources, subject to regular foreign exchange conversion rules:
NRE account
NRO account or local sources.
For NRIs, what would be the status of repatriation of the pension/ annuity and a lump sum to be paid out of the invested funds?

“When the pension/ annuity is to be paid, it shall be in local currency only (i.e. in INR). However, there is no restriction on the repatriation of a pension, whether paid as an annuity or in a lump sum. Provisions of Income Tax Act, 1961 subject to amendments from time to time, would be applicable,” according to the NPS FAQs.

How NRI can open an Aadhaar-based eNPS Account
Here’s how an NRI can open an Aadhaar-based e-NPS account,
as per the PFRDA

Step 1: Visit PFRDA/NPS Trust website and select “eNPS.”
To begin the registration procedure, click the “Registration” button and select “New Registration.”
Step 2: Select ‘ Non-Resident Indian (NRI)’ as the account type, then “Repatriable” or “Nonrepatriable” as the account type, and “Aadhaar” as the choice for registering.
Step 3: Click Generate OTP after entering your passport number and Aadhaar number.
Now, enter the OTP that was sent to the Aadhaar-registered mobile number and select Continue.
Step 4: Select a bank from the list of banks for bank verifications and submit NRE/NRO account data for repatriable eNPS accounts.
OR, for non-repatriable eNPS accounts, fill out bank account information from any bank and submit NRE/ NRO account information on a self-declaration basis.
Step 5: Demographic information and a photograph will be retrieved from the Aadhaar database and entered into an online form.
Step 6: Fill in the rest of the required information in other tabs.

Also read: How to open an Aadhaar-based eNPS NRI Account

How to generate PRAN
You need to make a preliminary contribution via the internet (minimum amount of Rs 500). After providing the payment information, you will be directed to the payment gateway. Upon successful payment, you will be granted a Permanent Retirement Account Number (PRAN).

In the case of a repatriable eNPS NRI account, additional contributions must be made using the account supplied during the registration procedure.
Initial and subsequent contributions to a non-repatriable eNPS NRI account can be made using any channel, including net banking, credit card, and debit card.

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