As a Nepali citizen working in India, you are considered a resident of India for taxation purposes if you meet the residency criteria set by the Indian Income Tax Act. Being a resident allows you to invest in various financial instruments available to Indian residents, including the Public Provident Fund (PPF).
Investing in PPF as a Nepali Citizen in India
🔹 Residency Status: Ensure that you meet the criteria for being a resident in India as per the Income Tax Act. If you qualify as a resident, you are eligible to invest in PPF.
🔹 PPF Eligibility: Nepali citizens residing in India can open a PPF account in designated banks or post offices. You will need to provide the necessary documents as proof of identity and address.
🔹 Investment Limit: The current maximum annual investment limit in PPF is ₹1.5 lakh. You can deposit this amount in your PPF account each financial year.
🔹 Tax Benefits: Investments in PPF are eligible for tax deductions under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free.
🔹 Maturity Period: PPF has a lock-in period of 15 years. You can extend the account in blocks of 5 years after maturity if desired.
🔹 Withdrawal Rules: Partial withdrawals are allowed from the 7th financial year onwards. Complete withdrawal is permitted after the maturity period.
🔹 Interest Rates: The interest rates on PPF are set by the government and are generally higher than regular savings accounts.
In conclusion, as a resident of India, you are eligible to invest in PPF, which can be a beneficial long-term savings option with tax benefits. Ensure you understand the terms and conditions of the PPF scheme before making your investment.