Thanks to the additional tax incentive, revised investment rules and other facilities introduced by the government to promote NPS, NPS assets have crossed the Rs. 1 lakh crore mark in October 2015.
NPS subscribers
“PFRDA has taken various steps at the policy as well as operational level to make NPS more subscriber friendly. In addition to this additional tax benefits made available exclusively to NPS has given a fillip to the scheme. This is further expected to result into a substantial increase in the subscriber base by end March 2016,” says a PFRDA release.
In addition, the recently introduced APY has also given a boost to NPS base. APY provides minimum guaranteed monthly pension to subscribers ranging from Rs. 1,000 to Rs. 5,000. Further, the government also contributes 50% of the total contribution made by a subscriber during a financial year subject to maximum of Rs 1,000 per annum for five years, if subscribers open the account by December 31, 2015. APY has close to eight lakh subscribers with AUM of Rs. 112 crore.
Here are some of the steps taken by the government to promote NPS:
- NPS can now invest in equity funds, ETFs, gilt, income and liquid funds
- Allowed partial withdrawal of up to 25% of subscriber’s own contribution for specific purpose like higher education of children, marriage of children, construction of house and illness after completion of 10 years in NPS.
- Private sector subscribers can continue contributing beyond 60 years up to 70 years of age
- Allowed additional tax benefit on investment of Rs.50,000 (over and above Rs. 1 lakh) under Section 80 CCD (applicable from FY 2015-16/assessment year 2016-17)
