Budget 2019: Since coming to power, govt implemented 7th Pay Commission recommendations, liberalised NPS, says FM

Budget 2019: Finance Minister Piyush Goyal in his speech said that since coming to power the NDA government has liberalised the New Pension Scheme (NPS).

In NPS, central government employees are required to invest in a compulsory manner, however, it is also open for other individuals on a voluntary basis. Photo: PTI

Budget 2019: Finance Minister Piyush Goyal in his speech said that since coming to power the government has implemented 7th Pay Commission recommendations and New Pension Scheme (NPS) has been liberalized. The Government's contribution in NPS had been increased 10% to 14%. This 4% included basic pay plus dearness allowance by the government.

NPS is a long-term investment and a best retirement plan of the Pension Fund Regulatory and Development Authority (PFRDA) and Central Government. In NPS, central government employees are needed to invest compulsory, however, it is also open voluntarily for other individuals.

Further, gratuity payment limit has been increased from 10 lakh to 20 lakh.

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Recently in December last year, the Finance Ministry announced, tax exemption limit for lump sum withdrawal on exit has been enhanced to 60%. With this, the entire withdrawal will now be exempt from income tax. (At present, 40% of the total accumulated corpus utilized for the purchase of the annuity is already tax exempted. Out of 60% of the accumulated corpus withdrawn by the NPS subscriber at the time of retirement, 40% is tax exempt and balance 20% is taxable.)

This means now not only a government employee will enjoy massive gains on NPS, but will also take home hefty money. This improves the living of these employees during their retirement age of 60 years.

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Budget 2019 National Pension Scheme