PFRDA will approach FM
seeking tax exemption for 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.
