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India's National Pension System (NPS) has bucked the downtrend triggered by Covid-19 outbreak and the subsequent nationwide lockdown to contain it. During the first three weeks of April, the scheme along with the <keyword id="2746514" type="PERSON" weightage="20" keywordseo="Atal-Pension-Yojana">Atal Pension Yojana</keyword> (APY) has seen an upsurge in new enrolments and an increase in assets under management (AUM) of these programmes. ALSO WATCH: The CEO of mutual fund house explains how to invest your savings in the post-coronavirus world <div type="Youtube" id="R0KmfIsR_90" title="How To Divide Your Savings Post Coronavirus" thumbUrl="https://i.ytimg.com/vi/R0KmfIsR_90/mqdefault.jpg"></div> In financial parlance, NPS and APY are Central government backed schemes which are administered by Pension Fund Regulatory and Development Authority (PFRDA). The PFRDA is the statutory authority established by an enactment of the Parliament, to regulate, promote and ensure orderly growth of the NPS and the pension schemes to which this Act applies. <div type="Article" hostid="261" msid="75468072" title="Here is a list of top 25 stocks that qualify for ‘Ten Baggers’, according to Ambit" mstype="2" mssubtype="0"></div> The NPS was initially notified for Central government employees joining service on or after January 1, 2004 and subsequently adopted by almost all State Governments for its employees. The NPS was extended to all citizens of India on a voluntary basis from May 2009 and to corporates in December 2011 and to Non-Resident Indians in October 2015. "There has been a spark... Almost more than 33,000-34000 people have joined during these first three weeks of April. The 'Total Assets Under Management' has also seen a record rise of Rs 12,000 crore," PFRDA's Chairman Supratim Bandyopadhyay told IANS. According to Bandyopadhyay, the corporate sector has shown a keen interest to get their employees enrolled into the NPS scheme. Similarly retail customers of the scheme have also grown. "We have seen a healthy response from the corporate customers. There are at least seven (companies) in the pipeline. They have either already got their board approval or in the process of getting the approval to subscribe," he said. Currently the PFRDA administered system has seven fund managers. "There has been a massive value addition in the stock prices during this time as we are able to invest in really good quality stocks at very reasonable prices," he said. On the impact of Covid-19, he said: "Till now we have not seen any redemption pressure. In fact, there has been negligible redemption from both the scheme." "In APY, we have made provisions that no automatic deduction from the accounts of subscribers happen for three months up to June." While the APY is a pension scheme focused on the unorganised sector workers, the NPS is a voluntary, defined contribution retirement savings scheme. Besides the NPS, some mutual funds and insurance companies also offer pension plans, which are not under the jurisdiction of PFRDA. Apart from this, the normal retirement plan options include EPFO, while retirement gratuity is offered by employers to their workers and employees. As of March 31, 2020, the combined total AUM of NPS and APY stood at Rs 4.17 lakh crore. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/irctc-share-price-has-jumped-30-in-april-so-far-despite-the-lockdown-thats-halted-trains-ticketing-and-even-rail-neer-sales/articleshow/75425845.cms" data-type="tilCustomLink" target="_blank">IRCTC share price has jumped 30% in April so far despite the lockdown that’s halted trains, ticketing, and even Rail Neer sales</a> <a href="https://www.businessinsider.in/personal-finance/news/a-personal-finance-expert-answers-the-most-troubling-questions-about-franklin-templeton-mutual-funds/articleshow/75348506.cms" data-type="tilCustomLink" target="_blank">A personal finance expert answers the most troubling questions about Franklin Templeton mutual funds</a> <a href="https://www.businessinsider.in/business/corporates/news/titans-sales-to-remain-muted-for-the-next-2-years-as-an-impact-of-coronavirus-lockdown/articleshow/75404925.cms" data-type="tilCustomLink" target="_blank">Without weddings and fewer Indians in a celebratory mood, Titan’s sales to remain muted for the next 2 years</a>

India's small savers parked over a $1.5 billion in pension schemes spooked by the stock market carnage in April

New Delhi, Apr 10 () The Pension Fund Regulatory and Development Authority of India (PFRDA) on Friday said NPS subscribers will now be allowed partial withdrawal for covering expenses related to treatment of COVID-19. In a circular addressed to all stakeholders and subscribers under the National Pension System (NPS), PFRDA said, "In view of the decision of the Government of India, which has declared COVID-19 as a pandemic, it has been decided to declare COVID-19 as a critical illness which is life threatening in nature." The partial withdrawals shall be permitted to fulfil financial needs of the subscribers, if required to him/her against the request placed for partial withdrawals towards treatment of the illness of subscriber, his legally wedded spouse, children, including a legally adopted child or dependent parents, as per the regulations, PFRDA said in the circular. PFRDA clarified that the facility of partial withdrawal will not be applicable for Atal Pension Yojana (APY) subscribers. "We would like to clarify that presently, there is no provision for subscribers to make partial withdrawals under APY," PFRDA added. NPS and APY are the two flagship pension scheme run by PFRDA. Whereas the NPS is for the central, state governments, autonomous bodies and corporates, APY is mainly meant to cater to the pension needs of those employed in the unorganised sector. The majority chunk of India's workforce is employed into the unorganised sector. As on March 31, the total number of subscribers under NPS and APY stood at 3.46 crore. Of this, the number of APY subscribers were 2.11 crore, as per data from PFRDA. KPM HRS

COVID-19 treatment: Govt allows partial withdrawal for NPS subscribers

New Delhi, May 12 () Paytm Money on Tuesday said it has added National Pension System (NPS) to its app after approval from the Pension Fund Regulatory and Development Authority (PFRDA). "This new addition is expected to benefit investors by helping them save for their retirement while also enabling tax benefits," a statement said. In 2009, the 'All Citizen Model' in NPS was launched that allows any individual to enroll in NPS. Till date, 13 lakh investors have enrolled under the 'All Citizen Model', the statement said, adding that Paytm Money intends to increase this number manifold by enabling investments in NPS via a simple and quick digital investing experience. "In a country like India with its huge young working population, retirement planning needs to be simplified. We want to bring NPS investing to millions of Indians and help them build a retirement corpus. "It sits perfectly with our vision of democratising wealth management in India," Amit Nayyar, President (Financial Services) at Paytm, said. NPS, as an offering, also incentivises users to save additional taxes and hence, complements the wide range of existing tax-saver mutual funds on Paytm's platform, he added. The statement said Paytm Money will offer NPS with the choice to invest in tier 1 (Tax Saver scheme) and tier 2 (zero lock-in period scheme). Paytm Money has more than 5 million users. SR RVK

Paytm Money adds NPS to platform

New Delhi, Apr 9 () The government is planning to allow subscribers of the Atal Pension Yojana (APY) for a partial withdrawal from employees' contribution as the current lockdown to battle Covid-19 has crippled the monetary power of workers in the unorganised sector. The government circular would be out in a day or two for adding Covid-19 as one of the conditions for partial withdrawal from pension fund by APY susbscribers, Pension Fund Regulatory and Development Authority of India (PFRDA) Chairman Supratim Bandyopadhyay told ."In our regulation, we already have an enabling provision of partial withdrawal for specific purposes such as life threatening kind of emergency, or some kind of critical illness and the likes. There we have done a classification that it should include Covid-19 also," Bandyopadhyay said.He said PFRDA has requested the finance ministry for enabling this provision."May be today or tomorrow this circular will be out," said the chairman of the pension fund regulatory body.He said as in case of other contingencies of partial withdrawal, the limit of withdrawal has been kept same at 25 per cent of the fund accrued of employee's contribution of the pension amount. As on March 31, 2019, the number of APY subscribers was 2.11 crore. The total number of subscribers under APY and NPS stood at 3.47 crore.PFRDA runs two flagship pension schemes -- APY and NPS (National Pension System).While the NPS caters to the central and state governments alongside autonomous bodies as well as individual taxpayers, APY is largely targeted for workers in the unorganised sector.India's majority workforce is employed with this sector which is facing hardship due to the lockdown. Bandyopadhyay said there is unlikely to be any disruption in terms of PF contribution from NPS subscribers. With regard to large and medium corporates also PFRDA is not seeing any kind of disruption, however, there may be some challenges with respect to small corporates. But, he also clarified that since the PFRDA schemes are flexible in nature as there are no due dates to make contributions, one can add funds to pension accounts at any time during a fiscal year.Individuals, salaried or self employed, can also subscribe to the NPS scheme wherein investment of up to Rs 50,000 a year is allowed tax free. KPM KPM ANUANU

Govt to allow Atal Pension subscribers for partial withdrawal from PF fund amid COVID-19 :PFRDA

New Delhi, Feb 1 () With an aim to strengthen the pension fund regulatory body's regulating role, Finance Minister Nirmala Sitharaman on Saturday proposed amendments in the PFRDA Act and forming of pension trusts by employees other than government.
Presenting the Union Budget 2020-21, the minister also proposed separating the role of the Pension Fund Regulatory and Development Authority of India (PFRDA) from that of trust for government employees.
"Regulating role of PFRDAI requires strengthening. Necessary amendments would be carried out in Pension Fund Regulatory Development Authority of India Act that will also facilitate separation of NPS trust for government employees from PFRDAI," Sitharaman said in her Budget speech in Parliament.
The Pension Fund Regulatory &amp; Development Authority Act was passed in September, 2013 and came to effect from February, 2014.
This would also enable establishment of a pension trust by the employees other than government, the minister said. 
"I am confident that this will motivate citizens to plan for their old age," she added.
Further, to help easy mobility while in jobs, she said the government wishes to infuse into the universal pension coverage with auto enrolment.
"Also, we wish to place such mechanisms which can enable inter-operability and provide safeguards for the accumulated corpus," she said.
The PFRDA regulates the National Pension System (NPS), subscribed by employees of central and state governments as well as by employees of private sector organizations those in unorganised sectors.
It also administers Atal Pension Yojana (APY), which mainly caters to the unorganised sector and low income groups.
As of November 9, 2019, the overall number of NPS and APY subscribers in the country crossed 3.12 crore with Asset under Management (AUM) of over Rs 3.85 lakh crore, as per the PFRDA data. KPM MKJ

Govt mulls separating PFRDA from govt staff trust, setting up pvt sector pension trusts

New Delhi, Nov 19 () The registration of Reliance Capital Pension Fund under the government's National Pension Scheme (NPS) has been cancelled following a request by the company, sector regulator PFRDA said in a notice.
With this, the pension fund is no longer available for subscription under NPS, said the Pension Fund Regulatory and Development Authority of India (PFRDA).
Earlier this year, the company had surrendered its NPS licence.
It was one of the eight companies registered under NPS to manage funds for subscribers from the private sector.
"This is to inform to general public that based on the request received from Reliance Capital Pension Fund Ltd, the certificate of registration granted to Reliance Capital Pension Fund Ltd has been cancelled by the Authority and the pension fund is no longer available for subscription under NPS," PFRDA said. 
The other seven funds for private sector subscribers are HDFC Pension Management Co, ICICI Prudential Pension Fund Management Co, Kotak Mahindra Pension Fund, LIC Pension Fund, SBI Pension Funds, UTI Retirement Solutions, and Birla Sunlife Pension Management.
LIC Pension Fund, UTI Retirement Solutions and SBI Pension Funds manage NPS for the government employees.
NPS is a pension cum investment scheme launched by the government to provide old age security to the citizens. 
There were about 1.28 NPS subscriber at end-October, 2019. NKD ANU
ANU

Reliance Capital Pension's registration under NPS cancelled: PFRDA

Mumbai, Dec 20 () The government is moving ahead to make Pension Fund Regulatory and Development Authority (PFRDA) as the sole watchdog for all pension products in the country, a senior official from the agency said on Friday.
 In its pre-budget proposal, the body has sought for a doubling of the Income Tax exemptions for contributions towards pensions to Rs 1 lakh under Section 80CCD (1B), PFRDA's Member (Finance) Supratim Bandyopadhyay, told reporters here.
 At present, pensions products are sold by both insurance companies as well mutual funds, which makes Irdai and Sebi, as the regulators for those products.
 "The in-principle approval has come from the Finance Ministry for the PFRDA Act amendment which will make PFRDA the single regulator for pension products," Bandyopadhyay said.
 He also said the authority expects the amendments to PFRDA Act to be passed by the Parliament during the Budget Session.
 In order to encourage more people to join the New Pension Scheme (NPS), he said PFRDA has made the proposal for doubling of the tax deductions under the scheme.
 The body has also recommended that the government allow Systematic Withdrawal Plans (SWPs) for National Pension System (NPS) instead of buying annuities, he said. AA RAM

Govt to make PFRDA sole regulator for pension products: Official

The just-announced <keyword id="22906567" type="General" weightage="100" keywordseo="Unified-Pension-Scheme" source="keywords">Unified Pension Scheme</keyword> for central <keyword id="19933272" type="General" weightage="20" keywordseo="government-employees" source="keywords">government employees</keyword> will be available only for those who are currently subscribers of the New Pension Scheme (NPS), including retirees. The new scheme guarantees employees 50% of their average basic pay over the last 12 months before retirement, as a pension for a minimum qualifying service of 25 years against a market returns linked payout under the NPS. According to the scheme approved by the Union Cabinet, the pension will be proportionate for a lesser service period of up to a minimum of 10 years. Also, assured pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service will be provided. The scheme has been brought out to address the concerns of government employees over NPS, which came into effect from January 1, 2004. Under the <keyword id="3246232" type="General" weightage="20" keywordseo="Old-Pension-Scheme" source="Orion">old pension scheme</keyword> (OPS), effective before January 2004, employees got 50 % of their last drawn basic pay as pension. Unlike the old pension scheme, UPS is contributory in nature, wherein employees will be required to contribute 10% of their basic salary and dearness allowance while the employer's contribution (the central government) will be 18.5%. Under the NPS, the employer contribution is 14%, and the employee contribution is 10%. However, the eventual payout depends on the market returns on that corpus, mostly invested in government debt. Employees, under the OPS, were not required to make any contribution. They, however, contributed to the General Provident Fund (GPF). The accumulated amount, along with interest, was paid to the employee at the time of retirement. As the NPS was less attractive than the OPS, several non-BJP-ruled states decided to go back to the old pension scheme, which offered a DA-linked benefit. This prompted the Centre to constitute a committee in April 2023, under former Finance Secretary and now Cabinet Secretary-designate TV Somanathan to suggest improvement in the NPS architecture. Fulfilling the long pending demands of government employees ahead of assembly elections in Haryana and Jammu and Kashmir, the Union Cabinet on August 24 approved the UPS, which will provide assured pension to 23 lakh eligible central government employees. Those opting for the UPS will not be able to switch back. The UPS will put an additional burden of Rs 6,250 crore on the exchequer per year. The expenditure will vary every year according to variations in the number of employees. In addition, there will be an arrear of Rs 800 crore that has to be paid under the National Pension System (NPS) to employees retiring before March 31, 2025. If these retirees opt for UPS, they will receive arrears. "UPS is being implemented by the Central Government, benefitting 23 lakh central government employees," Information &amp; Broadcasting Minister Ashwini Vaishnaw said on X on Sunday. If states also adopt the UPS architecture, a total of over 90 lakh government employees, who are presently on NPS, would be benefitted, he added. On Sunday, Maharashtra, where assembly elections are due later in the year, became the first state to announce the adoption of the UPS for its employees. RSS-affiliate Bharatiya Mazdoor Sangh (BMS) said though the government has attempted to overcome the shortcomings of the NPS, there are still some issues compared to OPS. BMS will decide its future course of action only after a detailed study of the UPS after it is notified. All India Trade Union Congress (AITUC) said it is nothing but an extension of the existing NPS. The trade union expressed apprehensions that UPS will have a lot of aberrations once implemented. AITUC reiterated that it will continue to fight for the restoration of the non-contributory OPS. ICRA Chief Economist Aditi Nayar said assured pensions will add to the government's committed expenditure in the future while reducing the uncertainty for employees. "This will have to be built into the fiscal consolidation roadmap going ahead," Nayar added. The UPS reflects a thoughtful approach to long-term social security, addressing concerns about the adequacy and sustainability of pension benefits in a rapidly changing economic landscape, said Shardul Amarchand Mangaldas &amp; Co Partner Dorothy Thomas. "This move signals the government's commitment to providing robust support for its workforce, enhancing financial stability for millions of government employees across the country," Thomas said.

Over 23 lakh govt employees under NPS get option to choose unified pension scheme

New Delhi, Dec 23 () Pension fund regulator PFRDA is pitching for doubling the tax benefit under the NPS to Rs 1 lakh in the upcoming Budget, according to a whole-time member of the authority.
 The Pension Fund Regulatory and Development Authority of India (PFRDA) has also urged the government to extend the facility of of tax free contribution of 14 per cent by the central government to its employees under the NPS to all categories of subscribers.
 The tax deduction under the NPS is Rs 50,000 at present.
 "For the Budget, we are trying to see that the Rs 50,000 investment which is tax free under National Pension System (NPS), it should be raised to an amount of Rs 1 lakh," PFRDA Whole Time Member Supratim Bandyopadhyay told .
 Employers' contribution of 14 per cent in pension for central government employees was made tax free from April 1, 2019.
 "We have requested that this facility should be extended to state government employees as well as the autonomous bodies of both central and state government," he added.
 For state government and autonomous bodies, as per the extant tax rules, up to 10 per cent of the employers' contribution is tax free and the rest 4 per cent is taxable at the hands of the employee.
 Maharashtra, Bihar, Karnataka, Uttar Pradesh, Uttarakhand and Himachal Pradesh have enhanced the employers' contribution under NPS to 14 per cent from 10 per cent earlier. While Punjab recently announced to raise its contribution to 14 per cent.
 "Apart from that we have been asking for increasing the age limit for subscription under Atal Pension Yojana (APY) from 40 to 60 years. And also to increase the pension limit from existing Rs 5,000 a month to Rs 10,000 per month under APY," Bandyopadhyay said.
 APY, the pension scheme for the unorganised sector employees as well as self earners, is sold to people under the age bracket of 18-40 years.
 Further, keeping in view a UN report which says that globally the population aged 65 and above is growing faster than all other age groups, he said the PFRDA is focussing in a big way on the APY to increase pension penetration in India.
 He said the pension regulator is conducting nationwide campaigns to bring more and more people in the informal sector to join the APY.
 When asked about gender wise subscription under the APY, he said it is majorly dominated by male participants, however, states like Tamil Nadu and Kerala show more and more women joining the schemes.
 "In places like Tamil Nadu and Kerala, we have seen that female participation is more because there our distribution channels are basically self-help groups (which are mainly run by women). One analysis is that when women subscribe to APY then their chances of staying with the system (APY) is more than male participants by 5 per cent," he said.
 He said the PFRDA has set a rough target of adding 75 lakh subscribers under APY in the current fiscal of which 47 lakh have already been added so far.
 "We have a very conservative target of 7.5 million under APY this year out of which we have already crossed 4.7 million and I believe that it is definitely possible (to reach the target) because the last three-four months like from December to March are the most productive months," he added.
 As of November 9, 2019, the overall number of NPS and APY subscribers in the country crossed 3.12 crore with Asset under Management (AUM) of over Rs 3.85 lakh crore , as per the PFRDA data.
 The PFRDA administers these two pension schemes. KPM KPM ANU
ANU

PFRDA wants govt to double tax benefit under NPS to Rs 1 lakh

New Delhi, Feb 26 () Pension Fund Regulatory and Development Authority of India is expected to add around 10-12 lakh new subscribers to its two pension schemes in the current fiscal ending March, newly-appointed Chairman Supratim Bandhopadhyay said on Wednesday.By March-end, the pension fund regulator, which runs Atal Pension Yojana (APY) and National Pension System (NPS), is expected to have nearly 3.48-3.50 crore subscribers on board.Total number of subscribers under the two schemes were around 3.38 crore as of February 22, 2020."By the end of the fiscal if you look at APY, there may be another close to 8-10 lakh additions and another 1-1.5 lakh for NPS. So all taken together, around 10-12 lakh new customers should join our fold by March-end," Bandhopadhyay said. Total asset under management (AUM) for these 337.63 lakh subscribers stood at Rs 4,21,336 crore as on February 22, 2020, according to the PRFDA data.Bandhopadhyay, who took charge on February 21, 2020, was the Whole Time Member (Finance) in the PFRDA for two years.Earlier to this, he was with the Life Insurance Corporation (LIC) for around three-and-a-half decades. He is a science graduate and a qualified Chartered Accountant. KPM MRMR

PFRDA likely to add 10-12 new subscribers by fiscal-end: Chairman

New Delhi, Apr 13 () In a major relief to Atal Pension Yojana (APY) subscribers in the wake of coronavirus pandemic, PFRDA has allowed deferment of their contribution until June 2020.The majority of APY subscribers belong to the lower strata of the society, and are expected to suffer the most during and after the lockdown.In such scenario, it may be difficult for them to keep contributing to the scheme regularly during such period, Pension Fund Regulatory and Development Authority of India (PFRDA) said in a circular.The outbreak of COVID-19 pandemic has impacted adversely to all the sections of the society. However, it is known fact that the disadvantaged and poor are most vulnerable to the economic effects of the said disease, it added."Therefore, it has been decided by the competent authority to stop auto-debiting savings account of the subscribers for APY contribution till 30th June 2020. "Also no penal interest will be charged to the APY subscribers if they regularize their APY accounts by depositing such non-deducted APY contributions along with regular APY contributions between 1st July, 20th and 30th Sept, 2020," PFRDA said.The regulator said that the modalities of payment of the allowed non-deducted APY contributions along with regular contributions will be out in due course."Keeping in view the above, all APY-SPs (service providers) are advised to stop auto-debiting the savings account of the subscribers for APY contribution amount with immediate effect till 30th June 20," it added.APY is a self contributory government guaranteed pension product which mainly caters to the people employed in the unorganised sector in India.Apart from APY, PFRDA runs the National Pension System (NPS) scheme which is for those employed in the organised sector and caters to people in the central and state government, autonomous bodies, corporate offices as well as salaried or self employed/business individuals.Last week, for the NPS subscribers, the pension fund agency has allowed for withdrawal to a certain limit from their accruals for Covid-19 related emergencies.As on March 31, 2020, the total number of subscribers under NPS and APY stood at 3.46 crore. Of this, the number of APY subscribers were 2.11 crore, as per PFRDA data.The total asset under management under these schemes stood at over Rs 4.17 lakh crore at the end of March 2020. Of this, the APY corpus was of Rs 10,526 crore. KPM KPM BALBAL

Covid-19: PFRDA allows deferment of Atal Pension subscribers' contribution till Jun

Contributions made to the Atal Pension Yojana (<keyword id="2748077" type="UNKNOWN" weightage="100" keywordseo="APY">APY</keyword>) will now onwards be considered eligible for the same tax benefits as the National Pension System (<keyword id="118491" type="ORGANIZATION" weightage="100" keywordseo="NPS">NPS</keyword>). The regulations has been set by a circular released by the <keyword id="65338" type="ORGANIZATION" weightage="100" keywordseo="Income-Tax-Department">Income Tax department</keyword>. 
 
As per the circular, the tax benefits for contributions to APY would include the additional deduction of Rs 50,000 under section 80CCD(1) introduced in last year's Budget. 
 
Talking of the scheme, APY is open to Indians aged between 18 and 40 years and the minimum tenure is of 20 years. Ever since it was launched in June last year, it has seen nearly 20 lakh subscriptions. 
 
After its release, APY replaced the NPS Lite or Swavalamban scheme, which had received about 45 lakh subscriptions in six years of its release. 
 
However, not everything is in the favour of investors here. The government will contribute 50% of the contribution made by the investor for a period of five years, the benefit of which will only go to subscribers who put in less than Rs 1,000 a year and those who would join the scheme before March 31, 2016. 
 
It also means that investors with taxable income are also not eligible for the benefits. 
 
Amongst the 20 lakh subscribers, small-ticket investors contribute a major part. The AUM of Rs 328 crore is spread across 19.77 lakh accounts, which makes the average balance per account to be only Rs 1,640. In comparison to this, NPS Lite, the scheme that it had replaced which benefited from the market rally since 2010 has about Rs 1,982 crore spread across 44.63 lakh accounts, making the average to be 4,440 per account. 
 
<a href="http://www.telanganastateinfo.com/wp-content/uploads/2015/05/Atal-Pension-Yojana.jpg">Image source</a>

The Govt’s making a big bet on this Pension Scheme and it may just pay off!

Even as several non-BJP ruled states like Rajasthan, Chhattisgarh, Himachal Pradesh, Punjab and <keyword id="6360371" type="General" weightage="80" keywordseo="jharkhand" source="Orion">Jharkhand</keyword> have started implementing the old pension scheme, the Reserve Bank of India (<keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword>) has cautioned that it would add to the financial burden of the states. In its report titled "State Finances: A Study of Budgets of 2022-23", the central bank has said that the move is a major risk to the "subnational fiscal horizon" and may lead to the accumulation of unfunded liabilities in the years to come. "A major risk looming large on the subnational fiscal horizon is the likely reversion to the old pension scheme by some states. The annual saving in fiscal resources that this move entails is short-lived," the RBI report said. By postponing the current expenses to the future, the report said states risk the accumulation of unfunded pension liabilities in the coming years. The governments of Rajasthan, Chhattisgarh, Himachal Pradesh, Punjab and Jharkhand have informed the Centre about their decision to implement the old pension scheme, which they had promised to do in their election manifestos. The decision by these states has led to a political tussle between non-BJP and BJP-ruled states. Incidentally it was the BJP-led NDA government, which in 2004, had done away with the old pension scheme from April 1, 2004 onwards. In its place, the government had introduced the National Pension Scheme, (NPS), under which government employees contribute 10 per cent of their basic salary towards their pension while the government contributes 14 per cent. The private sector was also included under the NPS system. Under the old pension scheme, retired government employees received 50 per cent of their last drawn salary as monthly pension, and the amount kept increasing with the hike in the DA rates. The old pension regime is not fiscally sustainable as it is not contributory in nature and the burden on the exchequer keeps on mounting, experts have said. Even former RBI governor <keyword id="46742" type="General" weightage="50" keywordseo="d-subbarao" source="Orion">D Subbarao</keyword> had spoken about the negative effects of the old pension scheme recently. "In a country where the large majority of the people have no social safety net, government servants with an assured pension are a privileged lot. Privileging them even further at the cost of the larger public will be morally wrong and fiscally detrimental," he had said. Subbarao had cautioned that if state governments revert to a "pay as you go" pension scheme, the burden of pensions will fall on current revenues, which in turn means foregoing schools, hospitals, roads and irrigation. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/britannias-q4-net-profit-rises-47-yoy-to-559-crore-on-softer-input-costs/articleshow/100017366.cms">Britannia’s Q4 net profit rises 47% YoY to ₹559 crore on softer input costs</a> <a href="https://www.businessinsider.in/business/news/indigo-airlines-stock-to-surge-further-as-go-firsts-troubles-mount/articleshow/100009541.cms">The skies are clearer for IndiGo stock to surge further as Go First’s troubles mount</a> <a href="https://www.businessinsider.in/finance/banks/news/raghuram-rajan-speaks-out-on-zombie-companies-a-simmering-real-estate-time-bomb-more/slidelist/100014762.cms">Raghuram Rajan speaks out on zombie companies, a simmering real estate time bomb &amp; more</a>

RBI sounds note of caution on OPS, says it may add to liabilities in future

The taxation laws in India contain a number of provisions to let the tax payers save on taxes. By taking some informed decisions on how you spend and account, you can save on taxes in a legitimate way. Here we discuss some important deductions under the Income Tax Act 1961. Tips to save on income tax Make the right use of Rs.1.5 lakhs limit allowed under Section 80C Investing up to a limit of Rs. 1.5 lakh in schemes like Tax-Saver FDs, PPF (Public Provident Fund), ELSS Funds, NSC (National Saving Certificate), Life Insurance Premiums, National Pension System (NPS), Home Loan Repayment, Payment of tuition fees of your children, EPF, Senior Citizens Savings Scheme, and Sukanya Samriddhi Yojana can enable you for appropriate tax deductions depending on the case. National Pension System This deduction facilitated by Section 80CCD (1B) allows up to Rs 50,000 for contributing to the National Pension Scheme. The NPS makes it possible to invest in equity and debt pension funds for building a corpus for the retirement life. This can be withdrawn at 60 years of age. Health Insurance Premiums Paying for health insurance premiums can let you qualify for a deduction up to Rs 25,000 under Section 80D. This is permitted on top of all the deductions listed above. In case of senior citizens, this limit is up to Rs. 50,000. The taxpayer contributing towards health insurance premiums for himself as well as for a senior citizen can claim a combined deduction of up to Rs. 75,000 per annum. Deduction on your rent If you are getting HRA, it is possible to claim tax deduction on your House Rent. Though there is no upper limit specified for this, there are some rules that place a cap on the maximum deduction. If you do not get HRA but pay towards rent, a maximum claim of up to Rs. 60,000 per annum is allowed under Section 80GG. Deduction on the home loan interest When you have a home loan running, the interest you pay towards the home loan is tax deductible under Section 24 of the Income tax Act. The maximum limit that you can claim in this regard is Rs. 2 lakh. If the house is rented out, there is no upper limit. Money in your savings account The easiest way to save money on income tax is to keep some money in your savings account. Up to a limit of Rs. 10,000 per year, the interest on savings accounts is tax free under the Section 80TTA. In case of senior citizens, this limit is up to Rs 50,000 applicable in cases of both FD and savings account interest. Give for charity Donations made towards charity enable you for tax deductions. Though there is no upper limit for this, there are different rules that restrict the amount deductible on the contributions towards charities. Across a majority types of donations to the NGOs, this limit is fixed at 50% of the donated amount and up to 10% of the total income that is adjusted. If you want to claim this deduction, the NGOs to which you contribute must have 80 G certificate.

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