NPS Lets NRIs Withdraw 80% at Exit, but Only 60% Stays Tax-Exempt
Updated
Updated · Moneycontrol · Sep 3
NPS Lets NRIs Withdraw 80% at Exit, but Only 60% Stays Tax-Exempt
3 articles · Updated · Moneycontrol · Sep 3
Summary
2025 PFRDA reforms now allow eligible non-government NPS subscribers, including NRIs, to withdraw up to 80% of their corpus at normal exit, with at least 20% still required for annuity purchase.
60% of the lump-sum withdrawal remains exempt under India’s Section 10(12A), meaning the higher payout limit does not make the full 80% tax-free.
NPS accounts do not lapse when a subscriber becomes an NRI, but KYC, residential status and bank details must be updated, and contributions should flow through NRE or NRO accounts under RBI and FEMA rules.
Corporate NPS accounts can also continue after a move abroad by shifting to the all-citizens model, preserving the PRAN and individual contributions.
U.S., UK and other foreign tax regimes may tax NPS growth or withdrawals differently, so DTAA terms and local reporting rules can matter as much as Indian tax benefits.