Modified Pension Account Closure Regulations: Specific Account Holders Affected - Find Out More Inside
Want to give up your Indian citizenship? Here's a lowdown on the process and what happens to your National Pension System (NPS) account if you do it!
Sayonara, Indian Citizenship!
Renouncing Indian citizenship is a formal affair that usually takes place when an individual acquires citizenship of another country. As India doesn't allow dual citizenship, it's a legal process that must be completed. You can say goodbye to your Indian citizenship by submitting a declaration either online or offline and paying a certain fee. To initiate the process, visit this government portal. Once the renunciation certificate is issued, you'll need to surrender your Indian passport at the nearest Indian Mission.
The New PFRDA Guidelines for NPS
The Pension Fund Regulatory and Development Authority (PFRDA) has come up with new guidelines for NPS subscribers who have given up their Indian citizenship or don't hold an Overseas Citizen of India (OCI) card. In such cases, the subscriber needs to inform the National Pension System Trust (NPS Trust) about the change in status and submit appropriate proofs. If approved, the subscriber's NPS account will be closed, and the accumulated pension wealth will be transferred to their Non-Resident Ordinary (NRO) bank account, in compliance with Foreign Exchange Management Act (FEMA) rules.
Who Can Enroll in NPS?
Initially, the NPS was restricted to Central Government employees. Luckily, the PFRDA broadened the eligibility criteria, allowing public and private sector employees, business owners, and self-employed individuals to join this retirement savings scheme. With NPS, everyone from salaried professionals to entrepreneurs can secure their golden years. To qualify, one must be an Indian citizen, whether resident or non-resident (NRI), aged between 18 and 70, and capable of executing a contract according to the Indian Contract Act. Overseas Citizens of India (OCI) are also eligible to open an NPS account.
Post-Renunciation: What's the Deal with Your NPS Account?
If you renounce your Indian citizenship and don't have an OCI card, here's what you need to do:
- Get in Touch with NPS Trust: As soon as your citizenship status changes, let the NPS Trust know about it and submit valid proofs.
- Shut Down Your NPS Account: Once your documents are verified, the NPS Trust will close your account, and the accumulated pension amount will be transferred to your NRO account, abiding by FEMA guidelines.
To close your NPS account, you'll need to submit an application with the following documents:- Renunciation certificate: Proof of citizenship surrender- Bank details: For transferring the funds
After verification, the NPS Trust and Central Recordkeeping Agencies (CRA) will complete the account closure process and transfer the deposit amount to your NRO account.
So there you have it! Stay up-to-date with pension fund regulations with the PFRDA's new rules for renouncing Indian citizenship and managing your NPS account.
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- In the process of renouncing Indian citizenship, individuals are required to relinquish their Indian passport at the nearest Indian Mission.
- After renouncing Indian citizenship, if an individual doesn't have an OCI card, they must inform the National Pension System Trust (NPS Trust) about the change in status and submit appropriate proofs.
- The Pension Fund Regulatory and Development Authority (PFRDA) has expanded the eligibility criteria for NPS, allowing not only government employees but also public and private sector employees, business owners, self-employed individuals, and Overseas Citizens of India (OCI) to join this retirement savings scheme.
- Post-renunciation, the subscriber's NPS account will be closed, and the accumulated pension wealth will be transferred to their Non-Resident Ordinary (NRO) bank account, in compliance with the Foreign Exchange Management Act (FEMA) rules.
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