TDS To Be Deducted On Annuity Payable to NRI or OCI NPS Subscribers

On the TDS deduction, the PFRDA has clarified that annuity payable to NRIs and OCIs by the annuity service providers or ASPs is liable for tax deduction at source at the rate applicable as per the Double Taxation Avoidance Agreement (DTAA) of the country in which the NRI or OCI resides.

The PFRDA in a circular dated December 17, 2019 said, "Based on the communication received from Insurance Regulatory and Development Authority of India (IRDAI), it is hereby clarified that Annuity payable by ASPs to NRIs and OCIs will be taxed at source, at rates applicable as per the DTAA (Double Taxation Avoidance Agreements) of the country where the annuitant resides. In 2019, the OCI or overseas citizens of India have been allowed to subscribe to National Pension Scheme or NPS at par with NRIs.

Further, the pension fund regulatory body directed intermediaries including ASPs to display or communicate to current as well as prospective NPS subscribers on their publicity channels such as websites, brochers that "Annuitanties payable to NRI/OCI are subject to TDS' and repatriation of the corpus, if any will be subject to applicable laws and regulatory provisions of IRDAI/PFRDA/RBI".

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