Budget 2021: ’Govt needs to make NPS fair for all subscriber categories’

The Union Budget will be presented on 1st February so I thought of making some suggestions to remove some anomalies and inequalities in the Income Tax Act provisions to make the NPS system fair and little more better for everyone. Under the EPF scheme the subscriber gets whole of the accumulated funds to his credit as tax-free at his retirement with full freedom to invest the it the way he wants whereas the NPS subscriber gets only upto 60% of the accumulated balance in his NPS account at the time of retirement as tax free and for the balance 40% he has to mandatorily buy an annuity from any life insurance company registered with IRDA. Presently only the Central Government employees are allowed to claim deduction under Section 80 C for contribution made towards tier II account with a lock in of three years. All the eligible subscribers should be allowed tax benefit for contribution towards Tier II account specially when with Tier II account offers you less risky products as compared with other product of same tenure. Uniformity of ceiling for employer’s contribution Tax benefits for contribution towards tier I account, for employer’s contribution for central government employees, is available up to 14% but when it comes to other employees it is capped at 10% which is eligible for deduction under Section 80CCD.