According to a government data, there are more than five lakh people who have subscribed to New Pension Scheme (NPS) as at June-end. Launched by the government for government employees, the benefits of NPS were extended to all citizens of the country from May 1, 2009. NPS allows 50% of the funds to invest in the stock markets.
The Minister of State for Finance informed the Rajya Sabha that the total number of subscribers in the New Pension System as on June 30, 2009 was 5,40,244.
Previously, the benefit of Section 80 CCD of the Income-Tax Act, 1961 were restricted to the employees of the central government and other employers (i.e. the salaried class). Other individuals (like self-employed) were not allowed to avail the benefits. Meanwhile, the minister has also said that The Finance Bill, 2009 has proposals for extending the benefit of Section 80 CCD of the Income-Tax Act, 1961 to all individuals.
For a healthy development of NPS, Finance Minister Pranab Mukherjee in his Budget allowed exemption from the STT to all purchase and sale of equity shares and derivatives by the NPS Trust. The pension fund industry players have welcomed the move to exempt the New Pension Scheme (NPS) Trust from the Securities Transaction Tax (STT).