Centre makes 60% pension withdrawal tax free, raises govt contribution to 14%

Agencies
December 10, 2018

New Delhi, Dec 10: Elaborating on taxability of fund under National Pension Scheme, the government on December 10 said that the entire 60 percent of the corpus withdrawn at the time of retirement will now be tax free.

"Earlier, while exiting the fund (at the time of retirement), 60 percent (of the corpus) was allowed to be withdrawn and the rest went to annuity. Of this 60 percent, 40 percent was tax free and 20 percent was taxable... Now, this entire 60 percent is tax free," Finance Minister Arun Jaitley told reporters.

He said that both entry stage contribution and 60 percent of the withdrawal amount is tax exempt.

"At present, 40 percent of the total accumulated corpus utilised for purchase of annuity is already tax exempted. Out of 60 percent, of the accumulated corpus withdrawn by the NPS subscriber at the time of retirement, 40 percent is tax exempt and balance 20 percent is taxable," statement by the ministry said.

Cabinet Committee of Economic Affairs, on December 6 approved amendments to the National Pension Scheme (NPS) and decided to increase the government's contribution, in the NPS tier - I, to 14 percent from 10 percent.

The amendment will be applicable for all the employees registered under the scheme after 1st January 2004. This number is expected to be 18 lakh.

The scheme will be notified (come into effect) from next financial year, once amendment to Finance Bill is passed.

"The exact date will be notified after the amendment to Finance bill (are passed by the Parliament)," Jaitley said.

According to government estimates, this would cost Centre close to Rs 2,840 crore in FY20.

Providing further tax relief to employees under NPS Tier-II scheme, the cabinet cleared applicability of Section 80C of Income Tax Act to such employees.

"Contribution by the Government employees under Tier-II of NPS will now be covered under Section 80 C for deduction up to Rs 1.50 lakh for the purpose of income tax at par with the other schemes such as General Provident Fund, Contributory Provident Fund, Employees Provident Fund and Public Provident Fund provided that there is a lock-in period of three years," the statement said.

The Cabinet, headed by Prime Minister, Narendra Modi, also approved various investment options for the employees.

Subhash Chandra Garg, secretary, Department of Expenditure, said that the employees would now have options to invest in various schemes from the accumulated corpus.

"There is a standard plan as per which certain amount is invested in government security, and certain amount is invested in equities or debt..." he said adding, "This debt oriented fund, which was limited up to 15 percent, will now have various options...".

The Secretary said that an employee could choose to invest up to 25 percent in equity or up to 50 percent in equities or take up "conservative" approach of investing 100 percent in equity.

"Each government employee will now have option of various fund managers... The three fund managers from the public sector and five from private sector," he said.

The eight NPS fund managers are Birla Sun Life Pension Scheme, HDFC Pension Fund, ICICI Prudential Pension Fund, Kotak Pension Fund, LIC Pension Fund, Reliance Capital Pension Fund, SBI Pension Fund and UTI Retirement Solutions.

Jaitley also said that all the employees who reported anomalies, between 2004 and 2012, in deposits, either due to delayed deposit or no-deposit will be compensated as per the new scheme.

"The cost of compensation will be over and above the cost estimated for 2019-20," government said.

The recommendations have come after a report was submitted, early in 2018, by committee of secretaries to suggest ways to streamline NPS.

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News Network
April 18,2020

New Delhi, Apr 18: With 957 new cases of COVID-19 in the last 24 hours and 36 deaths, India's total count of coronavirus cases has surged to 14,792, said the Union Ministry of Health and Family Welfare on Saturday.

The total cases are inclusive of 2,014 cured and discharged patients, one migrated and 488 deaths. At present, there are 12,289 active COVID-19 cases in the country.

Lav Aggarwal, Joint Secretary, Ministry of Health and Family Welfare said that mortality rate due to COVID-19 in our country is around 3.3 per cent.

"An age-wise analysis will tell you that 14.4 per cent of deaths have been reported in the age group of 0-45 years. Between 45-60 years it is 10.3 percent, between 60-75 years it is 33.1 percent and for 75 years, and above it is 42.2 percent," Aggarwal said at a press conference here.

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News Network
January 20,2020

New Delhi, Jan 20: Union Finance Minister Nirmala Sitharaman on Sunday said the kind of cleaning in the system that the BJP-led government had to carry out after coming to power in 2014 was "unbelievable" and it undertook the exercise without any grudge or worry.

Between 2014-16, there were a lot of questions as to why reforms did not come fast and there were comments that the government was incapable of bringing them, she said delivering the Nani Palkhivala Memorial lecture on "Road Map to $5 Trillion Economy" here.

Pointing out that there were allegations and criticism that the government wants to do something but it did not, Sitharaman said, "I am fully willing to buy that." She recalled that Prime Minister Narendra Modi often said he did not believe in incremental changes and the country needed good transformational change. The stage in which India is today, it cannot have little marginal increments, but good transformational change.

"But still one might say in the last five years the government never did. That can be a critical analysis and I am fully willing to buy that. Because post-2014 the kind of cleaning up the government had to do was unbelievable and we undertook that exercise without a grudge without a worry.. we had to do it and it is part of the game," she said. Elaborating, Sitharaman said states have their own views on Land Acquisition Bill and the government could not have done anything because land, after all, is with them.

Commenting on the topic 'Road Map to $5 trillion economy,' she said quoting Prime Minister Narendra Modi's comments, the government would take the route "Sarkar ka abhaav nahi hona chahiye, prabhaav hona chahiye aur dabaav nahi hona chahiye."

"Abhaav and dabaav both of which are not desirable, abhaav is the inadequacy or lack of adequate presence or shortfall. You do not need a shortfall. You need a government where it should be present, where it is expected to function.", she said.

"So there should not be abhaav. Dabaav (meaning pressure) is not something you want from the government. So, you want Prabhaav. It is broadly an influence, facilitation, broadly the philosophy with which it is mandated, she said.

Noting that the government has got the mandate through the election, she said, "The mandate was spelt out in so many different ways in its manifesto. So the route towards $5 trillion is this."

"We have to be there to facilitate. We have to be there to make it easy. We have to be where you need us, where there is no policy (reforms from the government)," she said.

On the Insolvency and Bankruptcy Code (IBC) implemented by the government, the union minister said the approach of the IBC was not to shut business. "IBC takes on the approach in having some kind of resolution where all people who exploited the company do not come back through the "back door," she said.

IBC was done through better management so that the institution is alive and kicking. It is something which she wanted to carry forward from Modi 1.0 to 2.0. "The point I am trying to make on this road to $5 trillion economy is that it is not just an abstraction, this is not how I want India to be. But in micro-level too, we are coming in response to every stakeholder," she said.

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Well Wisher
 - 
Tuesday, 21 Jan 2020

LOL. Do not say anything, else she will get angry.

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Agencies
June 15,2020

New Delhi, Jun 15: After Two Indian officials working with Indian High Commission in Pakistan wet missing on Monday,  the Ministry of External Affairs summoned Pakistan's Charge d'affaires to India in the national capital and told them not to interrogate or harass Indian officials.

"Two Indian High Commission officials are missing since morning while on official work. The matter has been taken up with the Pakistani authorities," Akhilesh Singh, First Secretary and spokesperson, Indian High Commission, Pakistan, said.

According to sources quoted by PTI news agency, the MEA told the  Pakistan's Charge d'affaires to India that the responsibility of safety and security of Indian personnel in Islamabad "lays squarely with Pakistani authorities."

"Pakistan was asked to ensure return of two Indian officials along with official car to Indian High Commission in Islamabad immediately," sources added. 

The incident comes after two Pakistani officials at the Pakistani High Commission in New Delhi were accused of espionage and deported.

The two officials have been missing since Monday morning. Officials said the issue has been taken up with the Pakistan government.

Earlier, a vehicle of India's Charge d'affaires Gaurav Ahluwalia was chased by Inter-Services Intelligence (ISI) member.

In March, the Indian High Commission in Pakistan sent a strong protest note to the foreign ministry in Islamabad protesting against the continuing harassment of its officers and staff by Pakistani agencies.

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