pension scheme articles

Retirement Saving – National Pension System (NPS)

NATIONAL PENSION SYSTEM (N.P.S.) BACKGROUND The National Pension System is a defined contribution scheme launched by Pension Fund Regulatory & Development Authority (P.F.R.D.A) in 2004 for government employees & subsequently in 2009 for all citizen. The eligible subscribers are allotted a 12 digit unique Permanent Retirement Accou...

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Posted Under: Finance |

Income Tax benefits under National Pension Scheme (NPS)

NPS is a government-sponsored pension scheme. It was launched in January 2004 for government employees. However, in 2009, it was opened to all sections. The scheme allows subscribers to contribute regularly in a pension account during their working life. On retirement, subscribers can withdraw a part of the corpus in a lump sum and use ...

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Posted Under: Finance |

Types of accounts under National Pension System

A person can open two accounts under National Pension System (NPS). The main account is called Tier I account and an additional account is labelled as Tier II account. Let us understand about both of these accounts. Features of Tier I NPS account: Tier I is the default and proper pension account under NPS. This […]...

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Posted Under: Finance |

Pensions Funds in India & Proposed Draft Rules 2020

On 18th August 2020, the Central Board of Direct Taxes has issued a list of guidelines that prescribe conditions for the pension funds in India to take the benefit of income tax exemptions vide Notification No. 67/2020-Income Tax/[G.S.R. 508(E)] dated-17/08/2020. The announcement comes after a July notification related to Draft Proposed...

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Posted Under: Finance |

How to open your NPS account

We have already discussed the basics of an NPS account in an earlier article. I have also explained that an NPS account can be opened online as well as offline. Let us understand how to open the NPS in both the ways. Read Earlier post: Introduction to NPS account Registering for NPS offline For opening […]...

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Posted Under: Finance |

New Pension Scheme

New Pension Scheme Everyone has a retirement plan for travel, leisure, meeting daily expenses, only one can enjoy retirement if one has available funds. Retirement is the condition when there is no active income, unlike developed countries, there is no Government support. With increasing, medical advancement life expectancy after retireme...

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Posted Under: Finance |

How Pension Income is Reported When Filing ITR?

The income tax return (ITR) forms issued by the Government for the financial year (FY) 2018-2019 require accurate reporting. For example, compared to previous years, where only aggregate amounts under allowances and perquisites had to be published, descriptions of various allowances as well as perquisites received during the FY are requir...

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Posted Under: Finance |

Exemption towards commuted value of pension Section 10(10A)

Provisions of section 10(10A) provide exemption towards the commuted value of a pension. Under the present article, we would understand the exemption available under section 10(10A) of the Income Tax Act. However, before understanding the exemption, it is important to understand the term ‘commuted pension’ and ‘uncommuted pension’...

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Posted Under: Finance |

Procedure for Online Registration of TAN

The income tax department has asked all deductors to register their TAN on NSDL web site. Once registered, the deductors will be provided User ID and password for authenticated access. Benefit of registration- The access will result in the following benefits to the deductors. View of status of all statements filed;...

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National Pension Scheme in India

National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return....

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Posted Under: Finance |

Taxability of employer’s contribution towards retirement benefit scheme (Impact of Finance Bill 2020)

As we know that employers use to contribute to the retirement benefit schemes of employees to enable them to maintain a quality life after retirement. Generally these contribution by employer can be in any one or in combination of following three forms: 1. Contribution to PF (Provident Fund) of the employees (Recognised PF, Unrecognised P...

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Posted Under: Finance |

All you want to know about Pension & Its Taxability

Article explains Who is eligible for pension/ family pension, What is the tax treatment for family pension received by the legal heirs of a deceased employee, Document to be filled for family pension in case of death, Documents to be filled when the name of the claimant member is not available in the records, What […]...

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TDS on Pension and Retirement Benefits

1. What is Pension? Pension is described in Section 60 of the CPC and Section 11 of the Pension Act as a periodical allowance or stipend granted on account of past service, particular merits, etc. It involves three essential features. Firstly, pension is a compensation for the past service, secondly, it owes its relationship to a past emp...

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Wrong Step for Salaried Class- Rs. 7.5 Lakh Limit on PF, NPS & Superannuation fund

It seems that the government is not happy for people earning more and the raise of salary they get after many years of hard-working. If people want to have a very good quality of retirement and improvised lifestyle in retirement is that act of Fraud. We financial advisor advice investor to have financial planning and […]...

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Posted Under: Finance |

Budget 2020: Tax on Employer’s contribution to RPFs, Superannuation Funds & NPS

Budget 2020: Rationalization of tax treatment of employer’s contribution to recognized provident funds (RPFs), superannuation funds and national pension scheme (NPS). Under the existing provisions of the Act, the contribution by the employer to the account of an employee in a recognized provident fund exceeding twelve per cent. of salar...

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Posted Under: Finance |

Taxation of pension

People working in government services or those working with government departments get pensions after retirement from their services additionally people who have contributed towards Employee Provident Fund (EPF) also get pension under Employee Pension Scheme (EPS), 1995. Even after the death of the employee their family members are also e...

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Posted Under: Finance |

Pension to Salaried – Tax provisions

To discuss the tax treatment of the pension received, comprehensively, the employees have been divided in two types, government and non-government. Even the pension received can be of two types, commuted and uncommuted....

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Posted Under: Finance |

Income Tax Exemption in Respect of retirement benefits

Article discusses Tax Treatment of Various retirement benefits i.e Gratuity, Leave Encasement, Commuted Pension, Uncommuted Pension, Statutory Provident Fund, Recognised Provident Fund and Unrecognised Provident Fund. ...

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Posted Under: Finance |

Deduction under section 80C and Tax Planning

Section 80C replaced the existing Section 88 with more or less the same investment mix available in Section 88. The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C. However, this new section has allowed a major change in the method of prov...

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Tax Treatment of Income from Salary in Brief

Salary is defined to include: a) Wages b) Annuity c) Pension d) Gratuity e) Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages f) Advance of Salary g) Leave Encashment h) Annual accretion to the balance of Recognized Provident Fund i) Transferred balance in Recognized Provident Fund j) Contribution by Cent...

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Posted Under: Finance |

Section 80CCD Deduction to National Pension System subscribers

(i) Under the existing provisions of section 10 of the Act, any payment from the NPS Trust to an assessee on closure of his account or on his opting out of the pension scheme, to the extent it does not exceed forty per cent of the total amount payable to him at the time of […]...

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Posted Under: Finance |

Response of Armed Forces on issue of taxability of disability pension

1. Some veterans have highlighted the case of Maj Gen Ian Cardozo (Retired) to express resentment against the recent directive to not allow tax exemption for disability pension. 2. Disability is granted to personnel who are disabled in combat or, during peace time and their disability is attributable to service conditions. The latter have...

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FAQ on National Pension Scheme (NPS)

What is National Pension Scheme (NPS)? National Pension Scheme (NPS) was initially launched in January 2004 for government employees but then in 2009, it was made available to every citizen of India whether resident or non-resident aged between 18-60 years. NPS allows you to contribute regularly in a pension account during their working l...

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Posted Under: Finance |

Higher Pension as per SC decision with Calculation & Examples

Employees’ Pension Scheme (EPS-95) offers pension on retirement, disablement, pension to widow and pension for nominees. This article explains how much EPS Pension you will get if you retire at the age of 58 years. Recently on 1st April 2019 Supreme Court has given the decision that the pension to be paid on actual salary rather than ...

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Posted Under: Finance |

Either INVEST or Pay TAX!

There are many options in the market where a person can invest and save his/her tax. But before investing anywhere, all the factors must be kept in mind like return on investment, risk involved, lock-in period, minimum and maximum amount that can be invested and many more....

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Posted Under: Finance |

Wrong Method of EPFO to Calculate Pension Under EPS 1995

Section 12(3)(b) – Past service pension for FPF1971 membership depends on salary and no. of years under FPF 1971 with minimum of Rs.80/- for 11 years or less on salary of Rs.2500 or less and maximum of Rs.170/- for 20 years or more for FPF1971 membership on salary of more than Rs.2500/-...

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Posted Under: Finance |

NPS Scheme Looking Attractive Now

A subscriber under NPS is entitled to get additional tax benefit up to Rs. 50,000 in a financial year under section 80CCD (IB) of Income Tax Act. This is over and above the deduction of Rs. 1,50,000 available under section 80C /80CCE of Income Tax Act ....

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Posted Under: Finance |

NPS Withdrawal: Norms, Purpose, Limits and Frequency

NPS Withdrawal Norms The Pension Fund Regulatory and Development Authority (PFRDA) has changed the norms for withdrawal of National Pension System (NPS) subscribers. Keeping in view the possibility of sudden financial needs of the subscribers, the requirement of minimum period under National Pension System (NPS) for availing the facility ...

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Posted Under: Finance |

How the cabinet decision on NPS affects you

Post my two articles on National Pension System (NPS), the cabinet has made certain important amendment to NPS on 6th December, 2018. There is confusion galore in the minds of taxpayers about the implications and applicability of the decisions. Taxation of pension Tax benefits for NPS contribution Let us discuss. Increase in the contribu...

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Tax implication of partial or full withdrawals from PPF, EPF & NPS

We have already discussed the withdrawal facility for three major retirement products- Employee Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS) in previous articles. Now it is logical to understand and discuss the tax implications for such withdrawals....

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Tax benefits for NPS contribution

After having discussed the withdrawal rules for National Pension System (NPS) last week, this let us discuss income tax benefits available for contributions made by you to your NPS account.  Though you can open Tier I and Tier II account under the NPS, the tax benefits are available only in respect of contributions made to […]...

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Posted Under: Finance |

National Pension Scheme-NPS- Mix of EET & EEE (whether only for tax saving or investment for retirement life)

Insertion of Section 10(12A) Finance Act (FA), 2016 was a welcome step by the CBDT to the NPS subscribers wherein 40% of the accumulated NPS corpus was made exempt from income tax on closure of NPS account at the time of withdrawal. Earlier, the entire amount was taxable. CBDT is introducing new provisions in IT Act to provide NPS a level...

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Posted Under: Finance |

FAQs: National Pension System For Non Resident Indians

NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account. NPS is designed on Defined contribution basis wherein the subscriber contributes to his own account. The benefit subscribers ultimately receive depends on the amount o...

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Posted Under: Finance |

National Pension System – Complete Guide

About National Pension System 1. What is National Pension System? National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based ret...

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Posted Under: Finance |

National Pension scheme: Additional Deduction of Rs. 50,000

An employee can claim overall deduction of Rs. 2,00,000 (i.e. Rs. 1,50,000 u/s 80C/80CCC/80CCD(1) and Rs. 50,000 u/s 80 80CCD(1B)) for National Pension scheme...

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Posted Under: Finance |

Social Security Agreement signed between India-Japan

Foreign assignments involving mobility of international workers has always been entangled in the complexities of two legislations. To ease out the hindrances and protect the interest of cross border workers of India and Japan, India has signed social security agreement (SSA) with Japan w.e.f. Oct 1, 2016....

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Budget 2017: Tax-exemption to partial withdrawal from National Pension System (NPS)

In order to provide further relief to an employee subscriber of NPS, it is proposed to amend the section 10 so as to provide exemption to partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and r...

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Posted Under: Finance |

Present Rates of Contribution under EPF, EPS and EDLI

Article cover Rate of Contribution under Employee Pension Scheme (EPS), Employees' Provident Fund (EPF) and Employee Deposit Linked Insurance (EDLI) Scheme...

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Posted Under: Finance |

How to Generate Jeevan Pramaan / Digital Life Certificate

Launched by Hon. PM Shri. Narendra Modi ji, on 10th Nov 2014, Digital Life Certificate for Pensioners Scheme of the Government of India, known as the Jeevan Pramaan...

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Jeevan Pramaan. Digital Life Certificate for Pensioners & FAQs

Jeevan Pramaan is a biometric enabled digital service for pensioners. Pensioners of Central Government, State Government or any other Government organization can take benefit of this facility....

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How the changes are occurring in Indian pension environment!

The pension environment in India has been the major growth booster through which several companies have been cashing on to. There are best pension plans in India which you can find for yourself to have better and promising returns. When it comes to the retirement plans there are indeed several options that you can pick from....

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Posted Under: Finance |

FM withdraws proposal to tax EPF/Superannuation Fund

In View of pressure from all quarters Finance Mister Arun Jaitley has withdrawn the Proposal to Tax 60% of EPF/Superannuation Fund Proposed in Union Budget 2016 and which was to come into effect from 01.04.2016....

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Tax on 60% of EPF/ NPS Contribution wef 01.04.2016

In order to bring greater parity in tax treatment of different types of pension plans, it is proposed to amend section 10 so as to provide that in respect of the contributions made on or after the 1 stday of April, 2016 by an employee participating in a recognised provident fund and superannuation fund, up to 40 % of the accumulated balan...

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Avail the Tax Bonanza by investing Rs. 50,000/- in NPS

One of the biggest tax saving bonanza by the Finance Act-2015 was insertion of sub-section 1B to section 80CCD in the Income Tax Act-1961 whereby an additional deduction of Rs. 50,000/- is offered to the taxpayer for contribution in the National Pension Scheme (NPS)....

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Income Tax provisions – Individual Salaried for A.Y 2015-16

The article covers Introduction, Residential Status, Tax Rates, Head-wise Taxation & Deduction available under the Act. Hope you will find it useful in this Return Filing Season....

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Posted Under: Finance |

Payment of Pension to Government Pensioners – FAQ

Updated as on June 01, 2015 Scheme for Payment of Pension to Government Pensioners by Authorised Banks The Reserve Bank of India (the Reserve Bank) oversees disbursement of pension by its agency banks in respect of all Central Government Departments and some State Governments. In the process, it receives queries/complaints from pensioners...

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Posted Under: Finance |

New Regulations of NPS on withdrawals

With the provision in the recent budget for allowing an additional deduction of Rs. 50,000/- in respect of contribution towards NPs, the interest of the taxpayers who till now did not have an NPS account has gone up substantially. People have started making enquiries and I have received a few emails seeking further guidance and clarifica...

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Posted Under: Finance |

All you wanted to know about NPS and additional benefit of Rs. 50,000

One my colleague Susan who is retiring this year was advised to deposit Rs. 50,000/- in NPS account this year to reduce her tax liability approached me for guidance. Based on my interaction with her I realised that the people generally do not know much about the NPS scheme in general and about this additional deduction of Rs. 50,000/- in ...

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Posted Under: Finance |

National Pension System – A Government’s New Initiative

The National Pension System (NPS) reflects Government’s new effort to find a suitable & sustainable solution to the problem of providing adequate retirement benefits to the people at large. As a first step towards initiating this, Government of India moved from a defined benefit pension to a defined contribution based pension system by...

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Posted Under: Finance |

Highlights of Revised Direct Tax Code

EET :EET will not include Government Provident Fund (GPF), PPF, Recognised Provided Funds, Pension Scheme administered by Pension Fund Regulatory and Development Authority as well as approved pure life insurance products and annuity scheme. These will be governed by EEE....

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ULIPS: New Regulatory & Tax Regime

NA (26/06/2010)

The tug of regulatory war over unit linked insurance plans (ULIPs) has ended with regulatory regime to be retained with insurance regulatory body (IRDA). The Central Government has promulgated an Ordinance (legislation) to the effect that ULIPs shall be regulated by IRDA only, thus ending the ongoing claims by both regulators- SEBI and I...

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Investing in new pension scheme (NPS)

When it comes to social security measures, India is still considered to be an evolving country even after more than sixty years of independence. Central Government has announced a new pension scheme (NPS) w.e.f. 1st May, 2009 established under Pension Fund Regulatory and Development Authority. The scheme has been in operation for governme...

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Posted Under: Finance |

Provident Fund contribution for International Workers

The Government of India has recently made fundamental changes in the Employees Provident Fund Scheme, 1952 and the Employees Pension Scheme, 1995 (collectively referred to as Indian Provident Fund schemes) which will impact the expatriates and the employers with whom they work in India....

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Posted Under: Finance |

Tax saving habit–a change is required series-1

All we need to do is to bring some changes in our habits and do the tax planning for the financial year 2009-10 in advance. Moreover before one decides for tax saving one should look into the all the list of probable deductions under which one gets benefits of tax saving....

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Posted Under: Finance |

New Pension System : A study in question answer mode

What is the New Pension System (NPS)? It is a system where individuals fund, during their work life, their financial security for old age when they no longer work. All those who join up would get a Permanent Retirement Account (PRA), which can be accessed online and through so-called points of presence (PoPs)....

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Pension plans are essentially investment products & can be quite taxing

Pension plans offered by insurance companies have gained tremendous popularity in recent years, though whether they really help the person retiring remains debatable. Also, this is that time of the year when investors are looking to save on income tax by making investments to that effect. Here are things you should keep in mind before [&h...

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Pension – Whether an allowable expenditure

In the present day scenario, looking at the high rate of attrition, it has become very necessary for the employers to provide various incentives to their employees in order to retain their services. One of such incentives is provision of pension to the employee after his retirement from service. In this context, it must be clearly underst...

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Posted Under: Finance |

Tax-treatment of payment by an employer to employees’ pension scheme

Of late it is becoming difficult for the employers to retain their top-level employees. Therefore, the employers are trying to provide additional benefits for such employees. In the present scenario most of the senior level employees are very much concerned about their post-retirement benefits viz. pension or some kind of other annuity af...

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