New NPS Rules: Do you want to close your pension account? PFRDA has issued new rules

Jyoti — Sat, 10 May 2025 10:52:24 +0000

New NPS Account Closure Rules : PFRDA has issued new guidelines for subscribers who have given up their Indian citizenship and do not have an Overseas Citizen of India (OCI) card.

These guidelines have been issued on April 21, 2025. As per the new rules, such subscribers will have to inform the NPS Trust about the change in their status and their NPS account will be closed.

Renunciation of Indian citizenship means that a person voluntarily gives up his Indian citizenship. This usually happens when a person acquires citizenship of another country, as India does not allow dual citizenship. Under this process, a person has to obtain a certificate of renunciation of Indian citizenship.

An NPS account can be opened by any Indian citizen between the ages of 18 and 70. Apart from this, persons who have renounced Indian citizenship and OCI cardholders can also open an NPS account if they follow the guidelines issued by PFRDA.

NPS account closing process

If a person gives up Indian citizenship and does not have an OCI card, he or she needs to take the following steps:

Inform the NPS Trust: Firstly, the subscriber needs to inform the NPS Trust about the change in his status and also submit the relevant certificate.
Closing an NPS account: Once the information is received, the NPS Trust will close the account. The accumulated pension amount will be transferred to the subscriber’s Non-Resident Ordinary (NRO) account, as per the Foreign Exchange Management Act (FEMA).

The following documents will be required to close an NPS account:

To close the account, a signed promissory note will be required confirming that you have renounced Indian citizenship and do not have an OCI card. After all the documents are verified, the account closure process will be done by the NPS Trust and the Central Recordkeeping Agency (CRA). After this, your entire pension amount will be transferred to your NRO account.

The process of closing an NPS account has become more clear now. If you have given up Indian citizenship and do not have an OCI card, you should immediately inform the NPS Trust and you can close your account by submitting the required documents and the amount will be safely transferred to your NRO account.

The post New NPS Rules: Do you want to close your pension account? PFRDA has issued new rules first appeared on Rightsofemployees.com.

New NPS Rule: Can you invest even after retirement? these are the rules

Jyoti — Mon, 28 Oct 2024 04:28:02 +0000

NPS Rule: National Payment System was started for government employees in the year 2004. In the year 2009, it was opened for all sections.

National Pension System (NPS) is an excellent investment option for retirement fund and monthly pension. By investing in NPS, you can not only secure your retirement but also avail tax exemption. In NPS, the investor gets a lump sum amount after retirement and along with it, he also gets the benefit of monthly pension. The special thing is that there is no tax on the amount received on maturity. If you think that investment can be made in NPS only during the job, then you are wrong.

According to the new rules, investment in NPS can be continued even after retirement. The Pension Fund Regulatory and Development Authority (PFRDA) has made several changes to make NPS more flexible. Now investment can be made even between the ages of 60 and 65, and the subscriber can continue contributing to NPS till the age of 70.

60% can be withdrawn on maturity

The entire fund cannot be withdrawn from NPS on maturity. 40 percent of the total fund is mandatorily used for annuity, which provides pension after retirement. The remaining 60 percent amount can be withdrawn in lump sum. If you do not want to withdraw your NPS deposits even after retirement, the government allows you to do so.

You get tax exemption

Investing in NPS also gives the benefit of tax exemption. You are entitled to tax deduction under sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Indian Income Tax Act, 1961. An additional deduction of up to Rs 50,000 can be availed on investment in NPS under section 80CCD(1B), which is in addition to the tax exemption of Rs 1.5 lakh under section 80C.

Types of NPS accounts

There are two types of accounts in NPS: Tier 1 and Tier 2. Tier 1 account is a retirement account, in which certain conditions apply for withdrawal of money. On the other hand, Tier 2 account is like a savings account, from which you can withdraw money without any restrictions.

New NPS Rule - Rightsofemployees.com