Expatriates in India are now allowed to withdraw the balance in their provident fund (social security) account upon retirement, i.e. when they reach the age of 58.
This development is based on a recent notification issued by the Indian Ministry of Labour and Employment. Expatriates can also withdraw their provident fund balance in cases of permanent disability and incapacity to work.
The ministry introduced the concept of “international workers” in 2008, which included foreign nationals employed in India. It was compulsory for international workers and their employers to contribute a certain percentage of their salary to the Employees’ Provident Fund Organization. Relaxations (based on totalization benefits) have been provided for foreigners from countries with which India has a social security arrangement (SSA). Therefore, international workers who are covered by an applicable SSA can withdraw their contributions according to the SSA provisions.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
