NEW DELHI: Non-resident Indians (NRIs) weren’t allowed to open public provident fund (PPF). Since December 2019, they have been additionally disallowed from contributing to an present PPF account that they had opened whereas they have been Indian residents.
Let’s have a look at the distinction between the outdated and the brand new guidelines that got here into existence in 2019 for PPF.
OLD RULES
Once Indian residents turn out to be NRIs, they weren’t allowed to open a brand new PPF account. However, if that they had one whereas they have been residents, they might make a contribution to that. On maturity, after 15 years, they might withdraw the cash like a resident.
The authorities had issued a notification in October 2017, amending the supply of the PPF scheme. It mentioned residents who opened a PPF account and subsequently turned NRIs, their account shall be deemed to be closed from the date of change of residential standing – from resident to non-resident. However, the federal government stored it in abeyance.
NEW RULES
In December 2019, the federal government notified the Public Provident Fund (PPF) Scheme, 2019, changing 1968 Scheme.
Under this new scheme, NRIs aren’t allowed to make recent deposits to their PPF account. However, they will proceed to carry the pre-existing accounts (opened after they have been residents) till maturity. The tax legal guidelines stay the identical – the proceeds are tax-free in India.
Even although proceeds are tax-free in India, NRIs might want to test how they’d be taxed of their respective international locations.
Note that Reserve Bank of India’s laws require NRIs to transform all their resident financial savings and deposit accounts to non-resident accounts (non-resident exterior or non-resident bizarre) upon their departure from India after they plan to settle overseas.
Existing EPF account
If you might be NRI and have an present Employee Provident Fund 9EPF) account, you’ll proceed to earn curiosity on it till you might be 58. If you’ve gotten accomplished 5 years of service, you may withdraw the stability after being out of employment for 60 days, even when you’ve got not attained the age of 58.
(Do you’ve gotten private finance queries? Send them to [email protected] and get them answered by business specialists)
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