- PFRDA wishes to double tax benefit under NPS to one lakh.
- Presently, the tax deduction under the NPS is Rs. 50,000.00
The Pension Fund Regulatory and Development Authority of India (PFRDA) has also urged the government to extend the facility of tax-free contribution of 14 % by the central govt. to its employees under the NPS to all categories of subscribers.
The tax deduction under the NPS is ₹50,000 at present.
The PFRDA is plunging for doubling the tax benefit under the NPS to ₹1 (one) lakh in the Budget-2020.
Employers’ contribution of 14 % in pension for central government employees was made tax free from 1st April 2019.
PFRDA’s Member Supratim Bandyopadhyay told that we are trying to see that the ₹50,000 investment which is tax-free under National Pension System (NPS), it should be raised to an amount of ₹1 (one) lakh.
“We have requested that this facility should be extended to state government employees as well as the autonomous bodies of both central and state government,” he said.
For state government and autonomous bodies, as per the extant tax rules, up to 10 per cent of the employers’ contribution is a tax- free and the rest 4 per cent is taxable at the hands of the employee.
When asked regarding gender-wise subscription under the APY, he said it is majorly dominated by male participants, however, states like Tamil Nadu and Kerala show more and more women joining the schemes.
APY- Atal Pension Yojana, the pension scheme for the unorganized sector employees as well as self earners, is sold to people under the age bracket of 18-40 years.
Further, keeping in view a UN report, which says that globally the population aged 65 and above is growing faster than all other age groups, he said the PFRDA is focusing in a big way on the APY to increase pension penetration in India.
He said the pension regulator is conducting nationwide campaigns to bring more and more people in the informal sector to join the APY.
In Tamil Nadu and Kerala, we have seen that female participation is more because there our distribution channels are mainly self-help groups (which are mainly run by women). One analysis is that when women subscribe to APY then their chances of staying with the system (APY) is more than male participants by 5 per cent,” he said.
He said the PFRDA has set a rough target of adding 75 lakh subscribers under APY in the current fiscal of which 47 lakh have already been added so far.
“We have a very conservative target of 7.5 million under APY this year out of which we have already crossed 4.7 million and I believe that it is definitely possible (to reach the target) because the last three-four months like from December to March are the most productive months,” he added.
As per the PFRDA data, the overall number of NPS and APY subscribers in the country crossed 3.12 crores with Asset under Management (AUM) of over ₹3.85 lakh crores.