Can Non Resident Indians invest in National Pension System (NPS)

National Pension System (NPS) is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account. NPS is designed on Defined contribution basis wherein the subscriber contributes to his own account. The benefit subscribers ultimately receive depends on the amount of contributions, the returns made on the contributions and the period of contributions.


Recommended Read: Young India – It is a good time to plan for retirement. Read about National Pension System (NPS)


Can a Non Resident Indian (NRI) join NPS?

Yes, an NRI between the age of 18 – 60 years, as on the date of submission of his/her application and complying with the extant KYC norms, can open an NPS account.


Can an NRI open a joint account in NPS?

No, only an individual account can be opened in NPS


Is account operation with Power of Attorney (POA) allowed under NPS for NRIs?

At present, POA facility is not available in NPS.


Where will the funds contributed by NRIs in NPS be invested?

NRIs have option to select Pension Fund Manager and exercise investment choice under NPS All Citizen Model. The fund is invested by the selected Pension Fund Manager in the various classes of securities, as per the investment guidelines prescribed by PFRDA. The investment is usually in Equity (E), Corporate Bonds (C) and /or Government Securities (G). The individual subscriber has a choice of selecting 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?

The contributions made by NRIs can be from either of the following sources subject to normal foreign exchange conversion norms:

  • NRE Account
  • NRO Account/ 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 repatriation of pension, whether paid as annuity or in lump sum. Provisions of Income Tax Act, 1961 subject to amendments from time to time, would be applicable.


Will payment of pension and withdrawal of the lump sum amount be treated as a current account transaction or a capital account transaction?

Since the withdrawal of lump sum or payment of pension is treated as income and chargeable to Income Tax, therefore, both the operations will be treated as a current account transaction.


Will NRIs have different Exit & Withdrawal rules compared to Resident Indians?

No, Exit & Withdrawal rules for NRIs shall be the same as for residents under the PFRDA (Exit and Withdrawals under the National Pension System) Regulations, 2015. All forms are available at


What are the Exit rules applicable for NRIs?

The Exit rules applicable for NRIs are

  • Upon attaining the age of 60 years
  • Exit from NPS before the age of 60 years
  • Upon Death of the Subscribe


Recommended Read: Is there any law which prescribes the retirement age in India?



What will happen to my savings if I decide to retire or do not want to continue in the NPS before age 60?

Such a premature exit would only be allowed to subscribers who have been with the NPS for at least 10 years. In such case, at least 80% of the accumulated pension wealth of the subscriber needs to be mandatorily utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.


Thought for the day

The higher we are placed, the more humbly we should walk



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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 25+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional and Registered Valuer (F&SA).Prasad welcomes your comments and questions. Please email him at

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