PFRDA chief hails NPS tax exemption, bats for parity

Tax exemption of up to 40 percent of the retirement corpus at the time of withdrawal under NPS is a big step by the government and going forward, there may be more parity between existing pension schemes, PFRDA Chairman Hemant G Contractor said on Wednesday.

PTI| Last Updated: Mar 16, 2016, 19:37 PM IST

New Delhi: Tax exemption of up to 40 percent of the retirement corpus at the time of withdrawal under NPS is a big step by the government and going forward, there may be more parity between existing pension schemes, PFRDA Chairman Hemant G Contractor said on Wednesday.

"This tax exemption up to 40 percent of the retirement corpus is a very big step that the government has taken and which brings us closer to EPF and other pension products. So, it is a welcome move," Contractor told reporters here.
"And hopefully. We should see some parity between the other pension schemes."
In the Budget presented by Finance Minister Arun Jaitley on February 29, the government said withdrawal up to 40 percent of the corpus at the time of retirement will be made tax exempt in the case of NPS.

The Pension Fund Regulatory and Development Authority (PFRDA) chairman said that though it has not asked the entire corpus under NPS to be made tax-exempt, there should be some parity with regard to other pension plans.
Besides, Contractor said the launch of eNPS online platform to open new accounts and make contributions to the existing accounts has led to an increased subscriber base.

"The traction is good now, we are getting about 600-700 accounts opening per day through eNPS. As far as Atal Pension Yojana (APY) is concerned, about 22.5 lakh accounts have been opened. The growth has been good, and we are getting 8,000-10,000 accounts opening under APY per day," he said.
Also, under the NPS scheme, there has been a higher growth from the voluntary or non-government sector, Contractor said, adding that about 85,000 subscribers have been added this year so far as against a total 80,000 subscription additions in the previous four years.
PFRDA sees the total addition under NPS of the order of 1 lakh by the end of this fiscal.
The total subscriber base under NPS is 1.18 crore as of now and the corpus under management is Rs 1.15 lakh crore.