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Pension sector needs tax incentives: PFRDA chief
Pension Fund Regulatory and Development Authority (PFRDA) chairman Hemant G. Contractor said on Wednesday that the government should consider offering tax incentives to the pension sector to expand its coverage to informal sector employees.
 
The PFRDA chairman said something needed to be done for the informal sector since it was inadequately covered under the pension scheme.
 
He was speaking on the sidelines of the launch of a Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG pension report.
 
The government-financed schemes were a must for the people in informal sector as they could not pay for their pension needs, Contractor said.
 
He said only 11 to 12 percent of India's working population in the organised sector were satisfactorily covered by pension schemes, mostly by government sector.
 
Contractor said parity in any tax treatment for National Pension Scheme (NPS) and waiver of service tax on purchase of annuity have been sought with the government.
 
Currently, the purchase of annuity attracts service tax.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Mr Jitendra

11 months ago

It is more than 11 years than the NPS was launched for Central and State Govt employees. It is now more than 6 years that the NPS was launched for general public and yet the general public is yet to appease that.
It is as simple as it is "ant and sugar". Unless you coat something with sugar, ants will not cling to it.

And so many PFRDA Chairman's have come and gone and asked the same thing from each govt: "give us EEE status" and yet not the UPA-2 and not the current government is ready to listen to that point.
UPA-2 worked on the DTC (Direct Tax Code) Bill, 2010. There were amendments made to dilute that original bill. Later, that DTC Bill 2013 was never taken on agenda.

I dont understand how the work happens at Lok Sabha, Rajya Sabha, PMO and other departments.

Moreover, there are no assurances from government that "people's money will be well managed" because the word "well managed" is quite ambiguous.
Another thing: NPS says that "compulsory annuity from a annuity provider is required at age 60". What is all annuity providers make a union and decide that they can offer only 3% interest rate on the NPS fund? See, the people demanding pension will be lakhs while the annuity providers will a certain few. Those few will easily exploit the NPS subscribers who will be retired from service.

MG Warrier

12 months ago

The PFRDA Chairman, by saying that “only 11 to 12 percent of India's working population in the organised sector were satisfactorily covered by pension schemes, mostly by government sector.”, is repeating the government’s arguments for introduction of NPS first for ‘future employees’ and then extending it to those in the unorganised sector. The main reason for discontinuing Defined Benefit Pension Scheme was increasing financial burden for the government. If NPS cannot become self-supporting, it can as well be scrapped and government should consider reverting to the pre-NPS situation when employees in the organised sector was covered by regular pension schemes and those outside were supported through other social security systems including EPF. The present NPS corpus could be transferred to EPFO for managing. PFRDA cannot expect government to subsidise NPS for all time to come. VII Pay Commission in Chapter 10.3 of its report has listed glaring deficiencies in the concept and administration of NPS. Remember, GOI had consciously excluded NPS from the ToRs of VI and VII CPCs.


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