NRI Current Affairs - 2020

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OCI can now apply for National Pension System

The Overseas Citizens of India (OCI) will now be eligible to apply for National Pension System (NPS) at par with Non Resident Indians (NRIs). The permission to permit OCI to enroll in NPS was given by Pension Fund Regulatory and Development Authority (PFRDA). The decision is one of the endeavours of PFRDA towards promoting and developing NPS and increasing pension coverage in country.

Key Highlights

As per a notification issued by Finance Ministry, now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till age of 65 years.

Condition: An OCI may subscribe to NPS provided such person is eligible to invest as per provisions of PFRDA Act and accumulated saving will be repatriable, subject to Foreign Exchange Management Act (FEMA) guidelines.

Till 26th of October 2019, the total number of subscribers under National Pension System (NPS) and Atal Pension Yojana (APY) has crossed 3.18 crores and Asset under Management has grown to over Rs.3.79 lakh crore. Subscribers enrolled under NPS includes more than 66 lakh government employees and 19.2 lakhs subscribers in private sector with 6,812 entities registered as corporates.

About National Pension System (NPS)

It was initially notified for Central government employees joining service on or after 1 January 2004. The NPS was subsequently adopted by almost all State Governments for its employees and was later extended to all citizens of India (on a voluntary basis) from May 2009, to corporates in December 2011 and to Non-Resident Indians (NRI) in October 2015.

A NPS subscriber can contribute regularly in a pension account during his/her working life, withdraw a part of corpus in a lumpsum and use remaining corpus to buy an annuity to secure a regular income after retirement.

In Union Budget 2019, the tax exemption limit under section 10(12A) of IT Act, for lump sum withdrawal on exit/maturity from NPS was increased from 40% to 60%. Moreover, the remaining 40% of corpus is already tax-exempt as it is mandatorily utilised for annuity purchase.

NOTE: PFRDA is a pension regulator of India. It administers and regulates National Pension System (NPS) and also administers Atal Pension Yojana (APY). It is a statutory authority established by PFRDA Act of Parliament, to promote, regulate and ensure orderly growth of NPS and pension schemes to which this Act applies.

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PIO cards to continue as valid travel document upto March 2020

The Persons of Indian Origin (PIO) cards along with valid foreign passport will be considered for exit or entry into India till 31 March 2020. Government of India had earlier advised all PIO card holders to convert their cards to Overseas Citizenship of India (OCI) cards by 30 September 2019.

Key Highlights

The Indian Consulate in Dubai, United Arab Emirates (UAE) stated that as per the latest advisory issued by Government of India-

  • The Bureau of Immigration (BoI) will now accept Persons of Indian Origin (PIO) cards as valid travel document till 31 March 2020 along with valid foreign passport
  • The Indian Immigration Check Post(s) will continue to consider all PIO cards valid for exit/entry into India till 31 March 2020

The advisory also stated that all the valid PIO cardholders as on 9 January 2015 are requested to apply for conversion of PIO card to OCI card as per guidelines at the earliest.

Condition: However, this extension of time-line is subject to condition that if in the meantime any deadline is notified by International Civil Aviation Organization (ICAO) thereby making hand written PIO cards invalid, then PIO cardholders may have to obtain appropriate visa from Indian Missions or Posts abroad.

What is Persons of Indian Origin Card (PIO Card)?

Overseas Indians also known as Non-resident Indians (NRIs) or Persons of Indian Origin (PIOs) are people of Indian birth/descent/origin who live outside Republic of India. PIO card was a form of identification issued to PIOs who held a passport in a foreign country other than following countries- Pakistan, Iran, Afghanistan, Bangladesh, Nepal, Bhutan, China and Sri Lanka. Thereby the Citizenship (Amendment) Act, 2003, made provision for acquisition of Overseas Citizenship of India (OCI) by Person of Indian Origin (PIOs) of 16 specified countries other than Pakistan and Bangladesh

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