At this time of the year, it is customary for there to be lots of 'budget expectations' kind of stuff in the media. Realistically, these should probably be called 'budget wishes', or 'budget dreams', or perhaps even 'budget fantasies'. Apart from small-ticket stuff like raising tax slabs, none of the big ideas that our breed of commentators write about seem to make it to the to-do list in the Union Budget, let alone actually get done at some point.
The other day, I looked over the archives of the budget fantasies that I'd put to paper over the years and it turned out that in February 2009, the major change that I'd hoped that the budget would bring is still undone, and seven years later, is still the first item on my wishlist for Budget 2016. The sad part is that we are not talking about some obscure issue that is just my hobby horse but about something that is central to making the National Pension System (NPS) a success.
The NPS is based on what is called EET (exempt-exempt-taxed) model of taxation. The invested amount and the reinvested returns are tax free but the final withdrawal is taxed. Many years ago, the Kelkar Committee on Direct Taxation recommended that all EEE options like PF and PPF be also moved to EET. Supposedly, the NPS is just the first to move into this EET system. Unfortunately, everyone knows that politically, making EPF and PPF withdrawals is impossible in the foreseeable future. Which boils down to rendering the NPS a non-starter from the taxation angle. Savers often cite this as an overarching reason for not using NPS as a vehicle for discretionary retirement savings.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
