New Delhi: The government on Monday gave a booster dose to its recently introduced pension system for all citizens to make it more acceptable.
The New Pension System introduced this May has received only a lukewarm response so far. In the Budget tabled in Parliament, the government said pension trusts will not have to pay securities transaction tax (STT) if they invest in the securities markets.
It also said the interim pension regulator will get Rs8 crore to run an advertising campaign to familiarize people about the scheme.
The budget said that self-employed persons subscribing to the NPS would be subjected to tax only at the time of withdrawal.
Other subscribers are already under this kind of tax treatment.
The budget also proposed to exempt the income of the pension trust from income tax and also the donor of dividend to the trust from dividend distribution tax.
All purchase and sale of equity shares and derivatives by the NPS trust will be exempt from the securities transaction tax, finance minister Pranab Mukherjee said in his Budget speech.
From 1 May this year, the interim pension regulator, Pension Fund Regulatory and Development Authority (PFRDA) extended the NPS to all citizens. But the new scheme did not attract a good response. It has collected just Rs80 lakh in the first two months of its launch.