Pension Fund Regulatory and Development Authority (PFRDA) was able to add a record 1.3 lakh new subscribers to the National Pension System (NPS) in 2015-16, which was more than the aggregate number of new subscribers opting for it in the previous four years. Subscribers opted for NPS in the previous year to benefit from the additional tax exemption of Rs 50,000 per year that the government provided over and above the Rs 1.5 lakh exemption on savings in specified products.
“The additional tax break of Rs 50,000 has been a real kicker for NPS. The tax break boosted interest in NPS as 1.3 lakh new subscribers opted for it. The online facility to subscribe for NPS also helped in attracting subscriber,” PFRDA Chairman Hemant Contractor said at a conference on implementation of the Atal Pension Yojana. He said the e-NPS facility launched in February this year drew good response as the PFRDA was able to add 32,000 subscribers in two months through this channel.
In the Budget for 2016-17, the finance ministry has made up to 40 per cent of the withdrawals from the NPS tax free, which is expected to attract investors in the current financial year. On the Atal Pension Yojana, which is a micro pension product for employees in the unorganised sector, Contractor said the regulator hopes to enroll a total of 60-70 lakh subscribers by the end of the current year.
Since its launch in July 2015, Atal Pension Yojana has 20 lakh subscribers. He said the subscriber base is expected to rise, as nearly 1.47 lakh offices of banks and post offices would be distributing this scheme.