New Delhi, July 5
Finance Minister Nirmala Sitharaman on Friday proposed to exempt from income tax 60% of the amount received by subscribers of National Pension System on closure of account or opting out of the scheme.
Under the existing provisions of the Income Tax Act, any payment from the NPS Trust to an assessee on closure of account or opting out of the pension scheme, up to 40% of the total amount payable, is exempt from the tax.
“With a view to enable the pensioner to have more disposable funds, it is proposed to amend the said section (10 of the Act) so as to increase the said exemption from 40% to 60% of the total amount payable to the person at the time of closure or his opting out of the scheme,” said a Budget document tabled in Parliament by the minister.
The proposed higher exemption limit will be applicable from April next year.
The minister also proposed to separate the NPS Trust from regulator Pension Fund Regulatory and Development Authority (PFRDA) in order to address issues over conflict of interest.
The PFRDA implements and regulates the National Pension System (NPS) and Atal Pension Yojana through various intermediaries, including the NPS Trust.
The matter of conflict of interest arises as PFRDA is the regulator of the pension sector in India, at the same time it runs pension schemes such as NPS and APY. — PTI
from The Tribune https://ift.tt/2LG2uTy
via Today’s News Headlines
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