The interim pension regulator has sought tax relief on investments in the New Pension Scheme (NPS) to make it more attractive to employees of private sector firms. The Pension Fund Regulatory and Development Authority (PFRDA) has written to the finance ministry seeking level playing field for NPS with other long-term savings schemes that will get tax benefits under the proposed Direct Taxes Code. “All we want is equal treatment,” a PFRDA official said.
NPS is currently under the Exempt-Exempt-Tax system, which means investment will be taxed when it is withdrawn. Provident fund and many of the small savings schemes are under the Exempt-Exempt-Exempt (EEE) regime, and are not taxed at any point.
The PFRDA has further requested for an additional window under Section 80C of the Income Tax Act for contributions by subscribers’ employers.
Investments in specified schemes up to Rs 1 lakh are exempt under Section 80 C of the Income Tax Act. The budget for this year has given an additional exemption of Rs 20,000 for investments in infrastructure schemes.
source:economictimes.indiatimes.com
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