Time has come to treat all pension products equally

Problem with different taxation structures will crop up once again if investors want to manage their retirement portfolio actively and try to change asset allocations in the middle. Shift between equity to debt and vice versa till final withdrawal are fully tax exempt for NPS and pension plans offered by insurance companies. However, any shift between mutual fund pension products in the middle are treated as tax incidence and therefore, investors are forced to pay tax on that. Hope the current budget will correct this anomaly and will allow mutual fund investors also to shift between different pension products without any tax incidence. Investors’ ability to shift between different pension products is also severely hampered right now.

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