Increase the Rs 1 lakh limit for pension funds: Swarup

Among all financial products, pension funds should be given the most favourable tax treatment. This is one of the suggestions given by D. Swarup, chairman, Pension Fund Regulatory and Development Authority (PFRDA). He said: “Since pension funds are a long term product, they should be given the most favourable tax treatment available. As of now, EEE (Exempt-Exempt-Exempt) is the most favourable and so pension funds should also come under the EEE system.”

Speaking at a seminar on the Indian Pension Fund Industry conducted by industry chamber Assocham, Swarup also suggested raising the Rs 1 lakh tax deduction available under section 80C for pension products. “The deduction over and above Rs 1 lakh, maybe Rs 20,000-30,000, should just be made available to the pension funds,” he said.

Since the PFRDA Bill is still in Parliament, the interim authority will be implementing the new pension system (NPS) for central and 19 states by appointing a central record keeping agency and four fund managers like SBI, PNB and LIC through the power of executive order issued by the finance ministry in the next three months.