Archive · 16 Sep 2026
How Indian PPF and NPS Tier II Change After Relocation
Moving to another country can change how your Indian savings accounts work.
You cannot open a new PPF account after becoming an NRI.
If you already have one, you can keep contributing until its original maturity date.
You cannot extend it after maturity while remaining an NRI.
You may also close it early after five years, but the interest will be reduced.
PPF money is generally tax-free in India, although your new country may tax it.
NPS Tier II is not available for new contributions after you become an NRI or OCI.
You generally must withdraw the Tier II money or move it to Tier I. Eligible NRIs and OCIs can still have an NPS Tier I account under the stated rules.
NRIs cannot open new PPF accounts, but existing accounts may continue until their original maturity date.
An NRI’s existing PPF account cannot be extended beyond maturity, although premature closure may be allowed after five years with reduced interest.
PPF interest, withdrawals, premature-closure proceeds and maturity amounts remain exempt from Indian income tax, but the country of residence may tax them.
NRIs and Overseas Citizens of India cannot open or continue contributing to NPS Tier II accounts after becoming non-residents.
Existing NPS Tier II balances must generally be withdrawn or transferred to Tier I, while eligible NRIs and OCIs may open or hold NPS Tier I accounts.
- Who
- Indian residents who move abroad and become NRIs, as well as Overseas Citizens of India and other NPS subscribers affected by non-resident rules.
- What
- The article explains how becoming a non-resident affects existing PPF and NPS Tier II accounts, including contributions, closure, maturity and taxation.
- When
- When an account holder’s residential status changes to non-resident, and when the PPF account reaches maturity.
- Where
- The accounts are held in India, while tax treatment may also be determined by the country where the individual becomes tax-resident.
- Why
- Indian rules restrict new PPF and NPS Tier II accounts for NRIs and OCIs and impose specific conditions on existing accounts.
- PPF for NRIs
- An existing PPF account may continue, with contributions, until its applicable maturity date; it cannot be extended afterward while the holder remains an NRI.
- PPF early closure
- Premature closure because of a residential-status change may be available after five years, with interest reduced by one percentage point for the relevant period.
- PPF taxation in India
- PPF interest and amounts received through partial withdrawal, premature closure or maturity remain exempt from Indian income tax under the rules described.
- Foreign taxation
- The individual’s country of tax residence may tax worldwide income, subject to its domestic law and any applicable tax treaty.
- NPS Tier II
- NRIs and OCIs cannot activate a new Tier II account or continue contributing to an existing Tier II account after becoming non-residents.
- Tier II balance
- An existing Tier II account generally must be closed and withdrawn or transferred to the subscriber’s Tier I account, subject to NPS rules.
- NPS Tier I
- Eligible NRIs may open or hold an NPS Tier I account; contributions must be made through NRE or NRO bank accounts.
- Compliance step
- Account holders should update residential status, KYC, overseas address, PAN and passport details with relevant banks and financial institutions.