Page 34 - Union Budget_2019

Union Budget 2019

6.4 Incentives to National Pension System (NPS) subscriber

In order to incentivise NPS subscriber, it is proposed to make the following:

• Amending provisions of Section 10 to increase the limit for exemption on withdrawal of funds from
NPS, at the time of closure or opting out of scheme, has been increased from 40% to 60%.

• Revising provisions of Section 80CCD to increase the deduction limit for employee’s contribution
made by Central Government for its employees, from 10% to 14%.

• Contribution by Central Government employee to his Tier-II account of pension scheme shall be
eligible for deduction under Section 80C, on fulfilment of following conditions: -

o The scheme shall be for a fixed period of not less than 3 years and
o It is in accordance with the scheme as may be notified by the Central Government in the

Official Gazette.
Tier-II account of pension scheme shall have specified features relating to choice of multiple pension
funds and multiple schemes, option of investing, minimum assured returns, etc. and shall allow

subscriber to freely withdraw part or all his money anytime.

These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to
assessment year 2020-21 and subsequent assessment years.

32