Here’s What Happens to Your NPS When You Renounce Indian Citizenship

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced new rules for National Pension System (NPS) subscribers who renounce Indian citizenship without obtaining an Overseas Citizen of India (OCI) card. These individuals are now required to close their NPS accounts and transfer funds to an NRO account.

PFRDA Issues New Guidelines for NPS Account Closure

In a circular dated April 21, 2025, the PFRDA announced fresh directives for handling NPS accounts of individuals who renounce Indian citizenship. According to the circular, if such a subscriber does not hold an OCI card, they must immediately notify the NPS Trust and initiate account closure.

Key Points of the New Rule

1. Who’s Affected?

NPS subscribers who have formally renounced their Indian citizenship and do not possess an OCI card.

2. What Needs to Be Done?

These individuals are required to notify the NPS Trust of their change in citizenship status. Submit valid documentation proving the renunciation.

3. What Happens to the NPS Account?

The Permanent Retirement Account Number (PRAN) linked to the NPS account will be closed.The entire accumulated pension wealth will be transferred to the subscriber’s NRO (Non-Resident Ordinary) bank account, in compliance with FEMA (Foreign Exchange Management Act) norms.

Documents Required for NPS Account Closure

To close the NPS account, the subscriber must submit:

• A signed undertaking declaring they’ve renounced Indian citizenship and don’t have an OCI card.

• A valid proof of renunciation, such as:

• Surrender certificate

• Certificate of renunciation

• Cancelled Indian passport (from an authorised authority)

Once verified, the NPS Trust, along with Central Recordkeeping Agencies (CRAs), will process the closure and transfer the funds accordingly.

Why This Matters?

India does not permit dual citizenship. As a result, any Indian who acquires foreign citizenship is required to legally renounce their Indian citizenship. These changes from PFRDA ensure regulatory alignment with this legal stance and safeguard the pension system from any jurisdictional or compliance issues.

Who Can Open an NPS Account?

• Any Indian citizen aged 18–70 years can open an NPS account voluntarily.

• Non-Resident Indians (NRIs) and OCI holders are also eligible, but must adhere to PFRDA’s evolving guidelines.

Read More: NPS vs Mutual Funds in 2025: Which One’s Giving Better Returns?

Conclusion

If you or someone you know is planning to give up Indian citizenship, especially without applying for an OCI card, it’s crucial to stay updated on these new PFRDA rules. Failing to inform the NPS Trust could lead to regulatory and financial complications.

The updated closure process ensures transparency and proper repatriation of funds while maintaining compliance with both Indian and global financial regulations.

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