LTCG will not impact NPS
The proposal of long-term capital gains tax will not have much impact on the National Pension Scheme (NPS), a top Pension Fund Regulatory and Development Authority (PFRDA) official has said.
- However, it will have an impact on tier-II accounts also known as a non-pension account, he said. NPS manages two types of accounts -- tier I and tier II.
- Tier II has no tax benefits. The Tier II account would be impacted but the investments corpus in tier II is much smaller.
- Budget 2018 had proposed to re-introduce long-term capital gains tax on gains arising from the transfer of listed equity shares exceeding Rs 1 lakh at 10 per cent(excluding cess). The same also implies on mutual funds. The total NPS corpus is currently Rs 2.25 lakh crore from a base of two crore subscribers.
- PFRDA also expects its Asset Under Management (AUM) would grow by 45-47 per cent in the next year.
- The Atal Pension Yojana, he said the pension fund body has targeted reaching one crore subscribers under the Yojana by March 31.