Booster dose for NPS



The government today gave a booster dose to to its recently introduced pension system for all citizens to make it more acceptable.

The new pension system introduced this May has received only a lukewarm response so far. In the Budget tabled in Parliament, the government said pension trusts would not have to pay the Securities Transaction Tax (STT) if they invested in the securities markets.

It also said the interim pension regulator would get Rs 8 crore to run an advertising campaign to familiarise people about the scheme.The Budget said that self-employed persons subscribing to the NPS would be subjected to tax only at the time of withdrawal.Other subscribers are already under this kind of tax treatment. The Budget also proposed to exempt the income of the pension trust from income tax and also the donor of dividend to the trust from the dividend distribution tax. All purchase and sale of equity shares and derivatives by the NPS trust will be exempted from the securities transaction tax, Finance Minister Pranab Mukherjee said in his Budget speech.

From May 1 this year, the interim pension regulator, the Pension Fund Regulatory and Development Authority (PFRDA) extended the NPS to all citizens. But the new scheme did not attract a good response. It has collected just Rs 80 lakh in the first two months of its launch.

Commenting on the measures taken by the government, a senior PFRDA official said, "We are happy with the incentives given to the NPS, but we would have liked it to be more." The official said the PFRDA had sought tax exemption under the exempt-exempt-exempt model, which means the subscriber would not be taxed even at the time of withdrawing money.

The PFRDA had earlier asked the government to bear the cost of maintaining accounts of policy holders under the NPS.However, nothing has been done in this direction, the official said.Under the present structure, a subscriber has to pay at least Rs 470, as initial charges in the first year and Rs 350 annually to the National Securities Depository (NSDL). Source: PTI

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Comments

Anonymous said…
YES FM SHOULD HAVE ANNOUNCED EXUMPT-EXMUPT-EXMUMPT MODEL FOR THIS SCHEME BECAUSE WHEN OTHER GOVT EMPLOYEES ARE NOT TAXED ON THEIR RETIREMENT BENFIT WHY POOR PUBLIC SHOULD BE PUNISHED AT THE TIME OF WITHDRAWAL FROM THIS SCHEME.

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