LTCG tax will not impact NPS, says PFRDA chairman
Kolkata: The proposal of long-term capital gains (LTCG) tax will not have much impact on the National Pension Scheme (NPS), a top Pension Fund Regulatory and Development Authority (PFRDA) official has said.
“It will not have much impact on us. The investments in the National Pension System are made by our trust (NPS Trust) which is a tax-exempted body. As far as pension investments are concerned, LTCG will not have an impact,” PFRDA chairman Hemant Contractor said here on Tuesday.
However, it will have an impact on tier II accounts also known as non-pension account, he said on the sidelines of a conference on the NPS in association with Stock Holding Corp.
NPS manages two types of accounts—tier I and tier II. “Tier II has no tax benefits. Tier II account would be impacted but investments corpus in tier II is much smaller,” Contractor said.
The Budget 2018 had proposed to re-introduce long-term capital gains tax on gains arising from the transfer of listed equity shares exceeding Rs1 lakh at 10% (excluding cess). The same also implies on mutual funds. The total NPS corpus is currently at Rs2.25 trillion from a base of two crore subscribers.
“Our subscriber base is growing by 27-28% a year. We just touched two crore subscribers’ mark. In March, there were about 1.54 crore subscribers. We expect to maintain the same pace of growth next year,” Contractor said.
PFRDA also expects that its asset under management (AUM) would grow by 45-47% in the next year.
Speaking on the Atal Pension Yojana, he said the pension fund body has the target of reaching one crore subscribers under the Yojana by March 31. “We currently have about 88 lakh subscribers with Rs 4,000 crore and we are trying hard in the remaining days of the year to touch the target. Next year, we will try for another 50 lakh,” the PFRDA chief said.
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