Regstreet Law Advisors

Pension Fund Regulatory And Development Authority (PFRDA)

1. Discontinuance of acceptance of any third party contribution in Tier II accounts under NPS

PFRDA in its Circular dated January 13, 2017 has notified that any third party contributions in Tier II account under National Pension System will be disallowed henceforth. Tier II account is a voluntary savings account which can be opened along with a Tier I account under NPS or can be activated by a Tier I account holder at a later stage.

This step is taken to ensure that the contribution to NPS account is made from the holder’s own bank account and through his legitimate source of funds.

2. TPFRDA allows Karvy Computershare to start operations as 2nd CRA

PFRDA vide a press release dated February 10, 2017, has granted permission to Karvy Computershare Private Limited (“Karvy”) to start its operations as second Central Recordkeeping Agency (“CRA”), for servicing of accounts sourced through e-NPS module of National Pension System (“NPS”) Trust with effect from February 15, 2017 and other distribution channels from February 21, 2017. CRA is a robust platform which is not only used by Governments to offer retirement benefits for their employees but also caters to the pension needs for the entire Indian population and offers customized solutions to various sectors. The subscriber would be provided an option to choose between NSDL e-governance Ltd (1st CRA) and Karvy (2nd CRA). Apart from giving choices to the subscribers to swap between two CRAs, Karvy’s entry into the domain is also expected to bring competition on the issue of charges charged by a CRA.

3. Funds transferred from Recognized Provident Fund/ Superannuation fund to National Pension Scheme not taxable

PFRDA vide circular dated March 06, 2017 has clarified subscribers to Recognized Provident Funds and Superannuation Funds would be able to transfer their corpus from these funds to National Pension System (NPS) without any tax implication. Accordingly, the process to transfer the funds is also specified for various Government and Private Employees separately under the Circular.

%d bloggers like this: