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Tax-exemption to partial withdrawal from National Pension System (NPS) : This benefit will be effective on partial withdrawal made by the subscriber after 1st April 2017.
Press Information Bureau
Government of India
Ministry of Finance
02-February-2017 12:20 IST
New Benefits announced for NPS Subscribers in Union Budget 2017-18
In a bid to provide further impetus to the National Pension System (NPS), the following provisions have been introduced in the Finance Bill 2017 laid down in the Parliament today.
Tax-exemption to partial withdrawal from National Pension System (NPS)
The existing provision of section 10(12A)of the Income Tax Act, 1961 provides that payment from National Pension System (NPS) to a subscriber on closurer of his account or opting out shall be exempt up to 40% of total corpus at the time of withdrawal . The amount utilized for purchase of annuity is also tax exempt. At the time of normal exit, 40% of the total corpus is mandatorily required to be purchased for annuity. The subscriber has the option to use higher amount for purchase of annuity.
In order to provide further relief to the subscriber of NPS, it has been proposed to insert a new clause (12B) in the section 10 of Income Tax Act, 1961 to provide exemption on partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under.
This benefit will be effective on partial withdrawal made by the subscriber after 1st April 2017.
Further, Contribution up to 20% of the Gross Income of the Self-employed individual (Individual other than salaried class) will be deductible from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961, as against 10% earlier.
This is with a view to provide parity between a salaried employee and a self-employed.
This benefit will be available on contribution made by the self employed persons on or after 1st April 2017.
This increased limit for tax benefit will help the self-employed individuals, to save taxes on higher contribution in NPS and thereby properly plan for their old age income security.
Additional tax deduction on investment upto Rs. 50000/- under Section 80CCD (1B) will continue to remain the same for all NPS subscribers whether salaried or self-employed.
Allotment of 12 Digit PPO Number to Pre-90 pensioners – regarding
Subject: Allotment of 12 Digit PPO Number to Pre-90 pensioners – regarding
Reference is invited to this office ciruclar No. CPAO/TECH/PRE-90/DBK/2011-12/115 dated 02.01.2012 (copy enclosed), regarding allotment of 12 Digit PPO Numbers to the Pre-90 pensioners/family pensioners. Since CPAO database recognizes only 12 digit PPO Number, it is required to lodge & track grievances and make queries on CPAO website. The 12 Digit PPO number is also required for the e-revision of pension. Therefore, all the Pay and Accounts officers are advised to follow the instructions contained in previous ciruclar dated 02.1.2012 for the conversion of Old PPOs. A list of all pending Pre-90 cases where PPO numbers are not yet converted into unique 12 digits PPO number is displayed at Sl.No 19 under the login of PAO in CPAO website www.cpao.nic.in.
All the Pr. CCAs/CCAs/CAs(IC) are requested to instruct concerned PAOs to download old cases and send the photocopies of PPOs along with duly filled proforma for allotment of 12 digits PPO Number.
Government’s decision on the recommendations of the Seventh Central Pay
Commission - Revision of pension of pre-2016 pensioners/family pensioners, etc
: SAMPLE CALCULATIONS i)REVISED PENSION OF PENSIONERS WHO
RETIRED BETWEEN 1-1-1986 & 31-12-1995 (4TH CPC
1: work out Notional pay as on 1.1.1996 = LPD
at the time of retirement + DA as on 1-1- 1996 was 148 % up
to Rs.3500 BP and 111% for BP Rs.3501 to 6000 with minimum of Rs.5180 + IR 1 Rs
100/- + IR II =10% of BP (min Rs100) + 40% fitment benefit sum total be placed
in appropriate stage in the 5th CPC scale corresponding to the scale
from which retired e.g
4th CPC scale =2000-60-2300-75-3200 LPD 2300 Notional pay = 2300 +3404
+100 +230 + 920 =6954 placing it at appropriate level of Corresponding 5th
CPC scale = 6500-200-10500 Notional pay as on 1.1.96 comes to Rs 7100 / Step
2: Work out Notional pay in 6th CPC PB 2 Rs 9300-34800 GP 4200…