Union Government’s recent move to extend New Pension System (NPS) to all the citizens of the country from May 1 this year seems to have gotten the desired results, after looking like it was going to be a damp squib. The system which found very few takers in the beginning, has been registering a respectable increase, especially after the government’s indirect extension of tax benefits on it.
Buoyed by the success, the government itself has come out with the figures of the increase in the number of people opting for the system.
Providing figures till June 30 this year, Minister of State for Finance Namo Narain Meena told Rajya Sabha in a written reply that the total number of NPS subscribers was 5,40,244.
The benefit under Section 80 CCD of the Income-Tax Act, 1961 was earlier restricted to the employees of the Central Government and other employers only. However it was not available for other individuals who were self employed.
The minister, meanwhile also said that the finance bill – 2009 has also taken into consideration the two main tax related issues which were hogging the NPS contribution. The Bill has proposed to extend the benefit of Section 80 CCD of the Income-Tax Act, 1961 to all individuals, he maintained.
In the Budget, the government had accorded EET (Exempt, Exempt and Tax) status to investments made in the NPS, which meant a subscriber will only be taxed at the time of withdrawal. His investments and income on investments will be exempted till he withdrew the accumulated income.
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