Budget initiatives give boost to NPS; subscribers soar to 1,100

Tax concessions announced by Finance Minister Pranab Mukherjee have given a boost to the new pension system (NPS) with the number of subscribers rising to over 1,100 against 300 prior to the Budget.

"There has been a quantum jump in the number of subscribers after the Budget announcement. The number subscribers has increased to more than 1,100 from 200-300 prior to the Budget," a PFRDA official said.

The official also said that some public sector enterprises have shown interest in joining the NPS, which was opened to all citizens from May 1 this year.

"One or two public sector entities have approached us and they want their corpus to be managed by the NPS. However, discussions are at the preliminary stages and it would take a month or so for some clarity on the issue," the official added.

Earlier, the Indian Banks' Association has shown interest in the NPS for new bank recruits. Though no concrete decision has been taken so far.

In the Budget tabled in Parliament, the government said that self-employed persons subscribing to the NPS would be subjected to tax only at the time of withdrawal. Other subscribers are already under this kind of tax treatment.

The official added that the NPS has mopped up about Rs 1.2 crore till date.

The Budget also proposed to exempt the income of the pension trust from income tax and also the donor of dividend to the trust from dividend distribution tax.

It also said pension trusts will not have to pay Securities Transaction Tax (STT) if they invest in the securities market.

It also said the interim pension regulator will get Rs 8 crore to run an advertising campaign to familiarise people about the scheme.