No income tax, DDT, STT on NPS income

Finance Minister Pranab Mukherjee on Monday said that he proposes to exempt the income of New Pension System Trust from the income tax and any dividend paid to this Trust from Dividend Distribution Tax.

Similarly, all purchases sales of equity shares and derivatives by the NPS Trust will also be exempt from this Securities Transaction Tax, he added.

The finance minister further proposed to enable self employed persons to participate in the NPS and avail of the tax benefits available thereto.

Underlining that NPS will continue to be subjected to the Exempt-Exempt-Taxed (EET) method of tax treatment of savings, Mukherjee said that it is proposed to provide necessary fiscal support to the NPS for the establishment this much needed social security system.

"The New Pension System is an important milestone in the development of a sustainable, efficient, voluntary and defined pension system in India," Mukherjee emphasized. -- PIB