Ahead of the budget, regulator Sebi on Thursday said equity markets are well regulated and it has made certain suggestions for deepening of capital markets. Sebi Chairman U K Sinha, who was among the financial sector regulators present at the FSDC meeting, offered suggestions for the forthcoming budget for 2017-18. Sinha, however, did not elaborate on the suggestions he made. “Number of issues and areas were discussed… The market is being well regulated, I don’t see any specific risk at this stage,” he told reporters.
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PFRDA Chairman Hemant Contractor said that he made a case for making taxation of National Pension Scheme EEE (Exempt, Exempt, Exempt), as against the present EET (Exempt, Exempt, Tax), to bring them at par with EPFO and PPF where the maturity amount is not taxed.
The retirement saving scheme NPS, run by PFRDA, falls under EET category, wherein investment gets deduction in the taxable income and also income/interest/gains are not taxed. However, maturity proceeds are taxable.
In the last Budget, Finance Minister Arun Jaitley had made withdrawals from NPS on maturity tax free up to 40 per cent of the total corpus, while the balance corpus of 60 per cent continue to be taxable. Under the ‘Triple E’ category investment, all three accrued interest and withdrawal are exempted from tax. This, according to PFRDA, would help in increasing the customer base. “Our emphasis was more on increasing pension coverage. The EEE benefit for NPS was the major demand. We have digitised a lot of our facilities,” Contractor said.