The Public Provident Fund (PPF) is a favoured savings instrument for many Indians,
thanks to its tax benefits and secure nature. However, when it comes to Non-Resident Indians (NRIs) and PPF, there’s a cloud of misconceptions that often leads to confusion. Let’s debunk some of these myths:

• Misconception: Many believe that NRIs are not allowed to open new PPF
  accounts.
• Reality: NRIs cannot open a new PPF account. However, if they had a PPF
  account before becoming an NRI, they could continue to maintain it until maturity.

1. PPF Accounts of NRIs Get Closed Automatically:

• Misconception: Once an individual becomes an NRI, their PPF account is
  automatically closed.
• Reality: The PPF account does not close automatically. It remains operational
  until maturity but operates with certain restrictions.

1. NRIs Can Continue to Invest in Existing PPF Accounts:

• Misconception: NRIs can keep investing in their existing PPF accounts without
  any issues.
• Reality: While the account remains active, NRIs cannot make fresh contributions
  to their PPF account once they attain NRI status.

1. PPF Withdrawals are Taxable for NRIs:

• Misconception: The amount withdrawn from PPF by NRIs is taxable.
• Reality: PPF withdrawals remain tax-free in India, irrespective of one’s residential
  status. However, NRIs should check the tax implications in their country of
  residence.

1. NRIs Can Extend Their PPF Account Beyond Maturity:

• Misconception: Like resident Indians, NRIs can also extend their PPF accounts
  beyond the 15-year maturity period.
• Reality: NRIs cannot extend their PPF accounts. Once the account matures, they
  must withdraw the entire amount.

PPF Interest Rates are Different for NRIs:

Misconception: NRIs receive a different (often believed to be lower) interest rate on their PPF accounts.

Reality: The interest rate for PPF is the same for both residents and NRIs. It’s set by the Indian government and is subject to periodic revisions.

Frequently Asked Questions (FAQs) about PPF for NRIs

Q1. Can NRIs open a new PPF account in India?
No, NRIs cannot open a new PPF account. However, if they had one before becoming an NRI, they can continue to maintain it.

Q2. What happens to my existing PPF account if I become an NRI?
You can continue to maintain your existing PPF account until its maturity. However, you cannot extend it beyond the maturity period.

Q3. Are the PPF returns for NRIs taxable in their country of residence?
Tax implications vary by country. It’s advisable to consult a local tax expert regarding the tax treatment of PPF returns in your country of residence.

Q4. Can NRIs withdraw from their PPF account?
Yes, NRIs can make withdrawals, subject to the standard PPF withdrawal rules.

Q5. Is the interest earned on PPF accounts tax-free for NRIs in India?
Yes, the interest earned is tax-free in India, but it’s essential to check the tax implications in the NRI’s country of residence.

Q6. Can NRIs deposit in their PPF account from their NRE or NRO account?
Yes, NRIs can deposit in their PPF account from their NRO account. However, deposits from NRE accounts are not allowed.

Q7. What is the current interest rate on PPF for NRIs?
The interest rate for NRIs is the same as for resident Indians and is revised quarterly.

Q8. Can NRIs extend their PPF account after maturity?

No, NRIs cannot extend their PPF account after maturity, even if it was opened before they attained NRI status.

Q9. Is there a penalty for not depositing the minimum amount in the PPF account?
Yes, a nominal penalty is charged if you don’t deposit the minimum required amount
in a financial year.

Q10. Can NRIs take a loan against their PPF account?
Yes, NRIs can avail loans against their PPF account, subject to the standard PPF
loan provisions.

Q11. How is the interest on PPF calculated for NRIs?
The interest calculation for NRIs is the same as for resident Indians, calculated monthly and credited annually.

Q12. Can I transfer my PPF account to another branch or bank?
Yes, PPF accounts can be transferred between branches or banks.

Q13. Do NRIs need to change the status of their PPF account after becoming an NRI?
No, there’s no need to change the account status. However, certain features and
benefits might be restricted.

Q14. Is a nomination facility available for NRI’s PPF account?
Yes, NRIs can nominate beneficiaries for their PPF account.

Q15. What happens to the PPF account if the account holder passes away?
The balance in the PPF account is paid to the nominee or the legal heir.

Q16. Can two NRIs jointly open a PPF account?
No, joint accounts are not allowed in PPF, whether for residents or NRIs.

Q17. Is the maturity amount from PPF repatriable for NRIs?
The maturity amount can be credited to the NRO account of the NRI, from which
repatriation is subject to certain conditions.

Q18. Can I change the nomination for my PPF account after becoming an NRI?

Yes, you can change the nomination for your PPF account anytime.

Q19. Are there any restrictions on deposit amounts for NRI PPF accounts?

The deposit limits for NRIs are the same as for resident Indians, with a minimum of INR 500 and a maximum of INR 1.5 lakhs in a financial year.

Q20. Can I convert my regular PPF account to an NRI PPF account?

There’s no separate NRI PPF account. If you had a PPF account before becoming an NRI, you could continue it till maturity but with certain restrictions.Rules Governing PPF Accounts for NRIs

The Public Provident Fund (PPF) has long been a popular savings instrument in India, offering attractive interest rates and tax benefits. However, for Non-Resident Indians (NRIs), the rules surrounding PPF accounts have undergone changes, making it essential to be updated. Here’s a comprehensive look at the regulations governing PPF accounts for NRIs:

Account Opening: NRIs ARE not allowed to open A new PPF account. However, if an individual had opened a PPF account while they were a resident of India and later changed their status to NRI, the account could be continued until its maturity.

Account Tenure: The standard PPF account has a tenure of 15 years. For NRIs who had opened their PPF account before becoming an NRI, they can’t extend the account beyond this tenure. Once matured, the funds remain locked and earn interest, but additional contributions aren’t allowed.

Interest Rate: The interest rate for NRIs on PPF accounts is the same as that for resident Indians. It’s set quarterly by the Government of India. However, it’s worth noting that once a person’s status changes to NRI, the interest earned becomes taxable in many foreign countries, depending on the Double Taxation Avoidance Agreement (DTAA).

For example, Raj, who moved to Australia, might have to pay tax in Australia on the interest he earns from his PPF account in India, based on the DTAA between India and Australia.

Contribution Limits: The annual contribution limit for PPF accounts is INR 1.5 lakhs. This limit applies to both residents and NRIs. However, NRIs can’t operate the account or make contributions if the account has matured after 15 years.

Repatriation: The principal amount and interest in the PPF account are fully repatriable for NRIs. However, the process might require additional documentation to prove the change in residency status.

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The Pension Fund Regulatory and Development Authority (Retirement Adviser) Regulations were notified in the year 2016. The objective of the Regulations is to provide a framework for eligibility of Retirement Advisers, their registration process, fees etc. of Retirement Advisers (RA) and to define the scope of work and responsibility of the Retirement Advisers to ensure orderly growth of pension sector

In order to expand the National Pension System (NPS) to NRIs, PFRDA has decided to amend the PFRDA (Retirement Adviser) Regulations, 2016 in order to facilitate RA to provide onboarding and advisory services to the NRIs.

Non Resident Indians (NRIs) between the ages of 18-60 years are eligible to join NPS on voluntary basis. NRIs have also been provided the online facility to open account under NPS besides the conventional mode of account opening through the Points-of-Presence (PoPs).

As on 30.03.2017, 2611 NRIs have subscribed to NPS, out of which 1401 NRIs have joined NPS during the financial year 2016-17.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

PIB

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In her address to the first limited edition of Pravasi Bhartiya Divas, Swaraj said it has been decided that women workers will be allowed to go to Gulf countries for employment only through government agencies to ensure they are not duped by recruiting agents or firms.

The PBD, webcast by almost all Indian Missions and Posts, was organised for the first time by External Affairs Ministry (MEA) after the government’s decision to merge Ministry of Overseas Indian Affairs (MOIA) with it.

Earlier MOIA used to host the event. January 9 was chosen as the day for PBD as it was on this day in 1915 that Mahatma Gandhi, the “greatest Pravasi”, returned home from South Africa to lead India’s freedom struggle.

Asking the diaspora to participate in government’s various flagship programmes including Skill India, Digital India and Clean Ganga initiatives, she said Prime Minister Narendra Modi wants the Aadhaar card scheme to be extended to NRIs.

“So far Aadhar card has been given to those Indians who live in India. It is not for non-resident Indians. But you will be happy to know that the Prime Minister wants the card to be given to the NRIs the way it is issued to people living in India.

“He even wants it for OCI (Overseas Citizens of India card) holders. The matter is under our consideration. No decision has been taken as discussions on it are underway. I hope soon you will hear about it,” Swaraj said during an interaction following her address.

The government has so far issued Aadhaar cards to over 92 crore citizens. Under the programme, every citizen is to be provided with a 12-digit unique identification number for which biometric information is collected.

On restricting women from going to Gulf countries through the recruiting agencies, she said the decision has been taken to stop them from getting duped.

“We will send women only through government agencies,” Swaraj said during an interactive session with Indian missions abroad.

Calling upon the diaspora to be part of the India growth story, she said “It is time for you to come back to India.”

Effusive in praise of the Prime Minister, Swaraj said India’s engagement with the overseas Indians has increased manifold because of his constant endevour to reach out to the community. Swaraj also mentioned Modi’s Madison Square address in the US and at the Wembly in London.

“Your achievements in the countries of your adoption are a matter of pride… It is our responsibility to protect you and take care of you. Indeed, we are you and you are us,” she said.

PTI

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