NEW DELHI: There is a need for increase in the income tax benefit for corporate sector employers contributing to the national pension system (NPS) to 12% and extend systematic lump sum withdrawal (SLW) to 100% under the scheme, Deepak Mohanty, Chairperson of PFRDA, said on Monday.
Employers can claim a tax benefit for contributing to the National Pension System (NPS) under Section 80CCD(2) of the Income Tax Act. The benefit allows employers to claim a deduction of up to 10% of the employee’s salary (basic salary plus dearness allowance) as a business expense. However, the maximum deduction limit is capped at `7.5 lakh per employee a year.
Pension fund regulatory and development authority (PFRDA) and NPS Trust recently organised the NPS Chintan Shivir, a platform for stakeholders to discuss and generate ideas for policy formulation in order to achieve a fully pensioned society and increase NPS acceptance in both organised and unorganised sectors.
During the event, banking secretary Vivek Joshi emphasised the need to simplify the enrolment process under the NPS and address the pain points.
Joshi highlighted that the potential for long-term investments in infrastructure, which aligns with the maturity profile of NPS investments. Joshi released an informative APY Flyer in all 22 languages specified in the Eighth Schedule of the Constitution of India. A panel of experts, including Ruma Ghosh, Dhirendra Kumar, Arvind Sahay, and Nilesh Shah, discussed strategies to increase the growth of NPS.