PFRDA will soon approach Finance Ministry seeking tax exemption for withdrawals under the National Pension System (NPS),
Pension regulator to pitch for tax break on NPS withdrawals
Pension regulator PFRDA will soon
approach Finance Ministry seeking tax exemption for withdrawals under
the National Pension System (NPS), its Chairman Hemant G Contractor has
said.
This will be the first time PFRDA – after getting statutory recognition in February 2014 – will seek a tax break for NPS.
The Finance Ministry will soon start the
budget preparation exercise for Budget 2015-16, which will be the first
comprehensive budget of the new Modi-Government.
Prior to the statutory recognition, the
interim pension regulator had sought tax exemption on NPS withdrawals,
but that tax break was not provided by the erstwhile UPA Government.
In his first interaction with
mediapersons here on Wednesday, the new PFRDA Chairman, Contractor said
there was need for some “fiscal” push from the Government to make NPS
popular in the country.
A tax exemption on NPS withdrawals would
address the “adequacy” aspect of retirement monies and ensure that
taxes don’t eat into the retirement corpus of a subscriber.
Under the current income tax law, there
is no tax incidence on contribution or accumulation phase, but tax would
be levied at the withdrawal stage
A tax exemption on NPS withdrawals would level the playing field with products such as provident funds.
The direct taxes code proposed by the
UPA regime had suggested that ‘Exempt-Exempt-Exempt’ regime be adopted
for financial savings products like NPS.
Indications are that the new dispensation at the Centre will look to bring its own version of new income-tax law.
SWAVALAMBAN
PFRDA Chairman Contractor said the
Swavalamban scheme has been made an integral part of the Pradhan Mantri
Jan Dhan Yojana (PMJDY), the flagship financial programme of the
Modi-led Government.
PFRDA has fixed a target of fifty five lakhs subscribers of Swavalamban under PMJDY.
This target of fifty five lakhs
subscribers has been allocated to all the banks working as aggregators.
Targets have also been allocated to other categories of aggregators.
Source: www.thehindubusinessline.com
#Income Tax, #Income Tax Exemption, #National Pension System, #New Pension Scheme, #NPS, #PFRDA
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