2024-04-08 02:00:44
New Delhi: The Finance Ministry has implemented both the new tax regime and the old tax regime for the financial year 2023-24. Taxpayers can choose either of the two tax regimes to file ITR and avail various tax benefits. But the pension scheme of the Pension Fund Regulatory and Development Authority (PFRDA) has suffered losses due to the new tax regime. Tax rates are low in this, but no exemption like tax will be given on investment. According to the report of Times of India, the data released by PFRDA on Thursday has estimated that the increase in the total subscriber base during the last financial year. Decreased by 16.3%. The share of private sector contributors in the National Pension System (NPS) with less than 36 lakh subscribers, which includes corporate schemes (where company and employee donations) and individual pension accounts, was estimated at 7.5%. It fell to 16.1% for corporate schemes in the last financial year, the lowest since 2020-21, when Covid-19 hit the economy.
Why is apathy increasing?
The reason why there is increasing apathy regarding this among government employees and also in the private sector is that there is no tax exemption on the additional contribution made by the company. When NPS started, employees and companies were contributing 10% to the pension corpus. Subsequently, the states and the central government increased the contribution to 14% of the employee’s salary. But the tax exemption was not extended. AUM under NPS grew by more than 30% to Rs 11.7 lakh crore at the end of March-2024, with government employees accounting for more than three-fourth, while the private sector’s share increased to 19.3%.
What do employees say?
Officials and experts have blamed the new tax regime for this. These things have come to light from the feedback shared by many companies. New tax regime is the default option. In the case of private sector companies, there is tax exemption for contribution to NPS, but the employee’s share will not get tax benefit. PF and Employee Pension Scheme, being the default option in companies, is being seen as a hindrance to the pension scheme of PFRDA. An industry source says that whenever an employee joins a company, he is given gratuity and PF papers without making him aware of other options.