Union Budget 2021: Will ask govt to make employers’ contribution, tier-II account tax free for all: PFRDA
New Delhi: Pension fund regulator PFRDA will suggest to the federal government to make employers’ contribution of 14 % below NPS tax free for all classes of subscribers within the subsequent Budget, Chairman Supratim Bandyopadhyay stated.
Employers’ contribution of 14 % in pension below the National Pension System (NPS) scheme for the central authorities staff was made tax free from April 1, 2019.
“We might suggest issues like 14 % contribution by employers to be made tax free to all. Currently, it’s given solely to the central authorities employers.
“So we are requesting the government to give it to all the employers, whether it is state governments or other corporate entities, so that subscribers across the board can get this benefit,” Bandyopadhyay advised PTI.
The PFRDA Chairman stated states are asking that the 14 % tax profit be given to state authorities staff additionally. He stated some state governments have written to the Authority requesting the identical.
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Besides, the Pension Fund Regulatory and Development Authority (PFRDA) will ask the federal government to increase the good thing about tier-II NPS account as tax free for all subscribers.
Recently, the ability was granted to the central authorities staff.
“There is this tier-II NPS account which was made tax free exclusively for the central government employees recently. So there also, we would request the government to give the facility to all the subscribers. In the tax-free tier II account we are keeping a lock-in period of 3 years because you are getting the tax-free status…And we want it to be extended to all the other employees,” he added.
A tier-II account below NPS isn’t a obligatory account, one can have it together with the tier-I account, he stated, including the profit with tier II account is that it may be withdrawn instantly.
Last month, the Finance Ministry had kicked off the train to arrange the Budget for 2021-22 amid the urgency to revive the financial system hit by the COVID-19 pandemic.
The upcoming Budget might be essential for the nation because it should take care of influence of pandemic which has affected all segments of the financial system, together with income assortment, disinvestment, expenditure, exports and meals costs.
Budget 2021-22 is more likely to be offered on February 1.
NPS, administered by PFRDA, is a voluntary, outlined contribution retirement financial savings scheme designed to allow the subscribers to make optimum selections about future wants.
There are two kinds of NPS accounts — tier-I and tier-II.
While tier-I is a non-withdrawable everlasting retirement account into which the accumulations are deposited and invested as per the choice of the subscriber, tier-II account is a voluntary withdrawable account which is allowed solely when there’s an energetic tier-I account.
The withdrawals are permitted from tier-II account as per the wants of the subscriber as and when claimed.
PFRDA administers two pension scheme– NPS and Atal Pension Yojana (APY). NPS is principally focused on the staff within the organised sector whereas APY is supposed primarily for these working within the unorganised sector.
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