The Pension Fund Regulatory and Development Authority (PFRDA) has come out with new guidelines for the National Pension System (NPS) subscribers who have renounced their Indian citizenship and do not have an Overseas Citizen of India (OCI) card.
The pension fund regulator in a circular has said that “in respect of such subscribers who have validly renounced their Indian citizenship and do not hold an OCI card, the said subscriber is required to forthwith intimate National Pension System Trust (NPS Trust) of the change in status along-with proof thereof and PRAN/NPS account held by the subscriber shall be closed and the entire accumulated pension wealth may be transferred to Non-Resident Ordinary (NRO) account only.”
What is renunciation of Indian citizenship?
Renouncing Indian citizenship is a formal process in which an Indian citizen voluntarily gives up his Indian citizenship. This is usually done when a person acquires citizenship of another country. India does not allow dual citizenship, so it is a legal process that needs to be completed.
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An Indian citizen looking to renounce citizenship must submit a declaration in a specified manner online or offline along with a certain fee. For online submission of form, one needs to visit https://indiancitizenshiponline.nic.in/. This form declares the intention to renounce Indian citizenship. Once the renunciation certificate is issued, the Indian passport must be surrendered at the nearest Indian Mission
Who can open an NPS account in India?
The NPS was exclusively available to Central Government employees. However, the PFRDA later extended it to a wider audience. Today, public and private sector employees, business owners, and self-employed individuals can also enrol in this retirement savings scheme. Whether you are a salaried professional or an entrepreneur, NPS is a national pension scheme designed for all eligible individuals.
The eligibility criteria are as follows:
Any Indian citizen, whether resident or non-resident (NRI), can apply for an NPS account. Overseas Citizens of India (OCI) are also eligible to open an NPS account.
The applicant must be between 18 and 70 years old at the time of application.
The individual must be legally capable of executing a contract, as per the Indian Contract Act.
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What should an NPS member do if he renounces Indian citizenship?
If an NPS account holder renounces Indian citizenship and does not have an OCI card, he or she must follow these steps:
- Immediately inform the NPS Trust
As soon as there is a change in citizenship status, the account holder must inform the NPS Trust and submit appropriate proofs.
- Close the NPS account
In such cases, the NPS account will be closed, and the entire pension amount accumulated will be transferred to the account holder’s NRO (Non-Resident Ordinary) bank account under FEMA (Foreign Exchange Management Act) rules.
How to close an NPS account?
The account holder must submit an application along with the following documents to close the account:
A signed declaration stating that they have renounced Indian citizenship and do not hold an OCI card.
A renunciation certificate, passport surrender certificate, or a cancelled Indian passport issued by an authorised institution.
After verification of all the documents, the NPS Trust and Central Recordkeeping Agencies (CRA) will complete the account closure process and transfer the deposit amount to your NRO account.