Kolkata: The Pension Fund Regulatory and Development Authority (PFRDA) on Friday said tax treatment on the National Pension Scheme (NPS) is a dampener and the regulator will continue to fight for a level-playing field.
PFRDA has been batting for EEE (Exempt Exempt Exempt) status for NPS. Under the current rules, the NPS corpus is taxable at the time of withdrawal.
"Tax treatment is an issue that has affected NPS. The taxation is associated with the scheme as it is taxed at maturity. All other competing products, including EPF, Public Provident Fund, are EEE while NPS is EET (Exempt Exempt Taxed)," PFRDA wholetime member B S Bhandari said.
He was speaking on the sidelines of a seminar organised by ICAI (east) on insurance and pension.
Bhandari said, "Whenever we meet government officials, we always emphasise on the need to give NPS a level-playing field. We have been asking for an EEE status. We will again do that in the forthcoming Budget."
In all, there are 92 lakh NPS subscribers with asset under management of Rs 86,500 crore.
Bhandari sees a huge scope for NPS as "it's the best product" if taxation part is set aside.
The total expense ratio is 3 percent for the entire vesting period of the scheme and 0.45 percent annual recurring charges, including AMC fees.
"In terms of cost to a subscriber, NPS charges are among the least globally," Bhandari said.
Meanwhile, PFRDA is exploring the possibility of keeping a tab on superannuation funds not regulated by any regulator at present and is in the process of gathering information from entities in the pension sector except EPFO.
"The pension landscape in the country is varied. Now, we are trying to see whether there is adequate regulatory framework for protection of subscribers' interest. We have written to some of the entities and companies. We are now collecting information on this matter before deciding how to proceed," Bhandari said.
PFRDA has set an ambitious target of having two crore Atal Pension subscribers by 2015-end.
