NPS contribution of Centre up, no withdrawal tax

Tribune News Service
New Delhi, December 10

The Centre today announced an increase in its contribution to the National Pension Scheme (NPS) for its employees from 10 to 14 per cent, besides making withdrawal from the fund entirely tax-free at the time of retirement. 

The minimum employee contribution will, however, remain at 10 per cent.

The decision, which will benefit around 18 lakh Central Government employees, was taken at a Cabinet meeting last week, Finance Minister Arun Jaitley said.

Under the NPS, the subscriber is eligible to withdraw 60 per cent of the corpus, while the remaining 40 per cent of the accumulated fund goes towards annuity.

The tax exemption limit for lumpsum withdrawal on exit has been enhanced to 60 per cent. The entire withdrawal will now be exempt from income tax, applicable for all sections.