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.