Tax exemption for NPS withdrawal

A great bonanza- 14% of the basic salary of 18 lakhs central Government employees will be added to their pension corpus, up from 10%. Thus, the Government made National Pension Scheme- a Government sponsored pension scheme launched in January 2004 for government employees and for private sector employees in 2009,more lucrative for investors. The contribution from employees’ side will be 10%. Moreover, while Finance Minister Arun Jaitley announced this change on Monday, he also said that the withdrawal of the NPS at the time of retirement will be tax free. At present 40% of the total accumulated corpus utilised for purchase of annuity is tax exempt. Of the remaining 20% was taxable. Now whole 60% is exempted from tax.