NATIONAL PENSION SYSTEM
FOR NRI -Tax Benefits and Implications
For NRIs, what would be the status of repatriation of the pension/ annuity and 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 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.
What income tax reliefs are available to the individuals contributing to NPS?
Tax benefit to self-employed: Eligible for tax deduction up to 10 % of gross income earned from Indian sources under Sec 80 CCD(1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE of IT Act, 1961.
Additional Tax benefit w.e.f 2015-16 From F.Y. 2015-16, subscriber are allowed extra tax deduction in addition to the deduction allowed under Sec. 80CCD(1) for additional contribution in his NPS account subject to maximum of Rs. 50,000/- under sec. 80CCD 1(B) of IT Act, 1961.
FOR NRI -Tax Benefits and Implications
For NRIs, what would be the status of repatriation of the pension/ annuity and 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 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.
What income tax reliefs are available to the individuals contributing to NPS?
Tax benefit to self-employed: Eligible for tax deduction up to 10 % of gross income earned from Indian sources under Sec 80 CCD(1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE of IT Act, 1961.
Additional Tax benefit w.e.f 2015-16 From F.Y. 2015-16, subscriber are allowed extra tax deduction in addition to the deduction allowed under Sec. 80CCD(1) for additional contribution in his NPS account subject to maximum of Rs. 50,000/- under sec. 80CCD 1(B) of IT Act, 1961.
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