PFRDA Urged Government To Double Tax Benefit Under NPS To Rs 1 Lakh

PFRDA Urged Government To Double Tax Benefit Under NPS To Rs 1 Lakh

Pension Fund Regulatory and Development Authority of India (PFRDA) wants government to double the tax benefit under NPS to Rs 1 lakh

Pension fund regulator PFRDA is pitching for doubling the tax benefit under the NPS to Rs 1 lakh in the upcoming Budget, according to a whole-time member of the authority.

The Pension Fund Regulatory and Development Authority of India (PFRDA) has also urged the government to extend the facility of of tax free contribution of 14 per cent by the central government to its employees under the NPS to all categories of subscribers.

The tax deduction under the NPS is Rs 50,000 at present.

“For the Budget, we are trying to see that the Rs 50,000 investment which is tax free under National Pension System (NPS), it should be raised to an amount of Rs 1 lakh,” PFRDA Whole Time Member Supratim Bandyopadhyay told PTI.

Employers’ contribution of 14 per cent in pension for central government employees was made tax free from April 1, 2019.

“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 added.

For state government and autonomous bodies, as per the extant tax rules, up to 10 per cent of the employers’ contribution is tax free and the rest 4 per cent is taxable at the hands of the employee.

Maharashtra, Bihar, Karnataka, Uttar Pradesh, Uttarakhand and Himachal Pradesh have enhanced the employers’ contribution under NPS to 14 per cent from 10 per cent earlier. While Punjab recently announced to raise its contribution to 14 per cent.

“Apart from that we have been asking for increasing the age limit for subscription under Atal Pension Yojana (APY) from 40 to 60 years. And also to increase the pension limit from existing Rs 5,000 a month to Rs 10,000 per month under APY,” Bandyopadhyay said.

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