MUMBAI (Maharashtra) [India], December 30 (ANI): The pension sector has appealed to the government to restore the additional Rs 50,000 tax benefit for the National Pension System (NPS) under the new tax regime in the forthcoming Union Budget, citing the incentives as essential to expand coverage beyond salaried individuals, Axis Pension Fund CEO and Managing Director Sumit Shukla told ANI.
“Tax benefit of Rs 50,000 under Section 80C should be restored for NPS in the new tax regime. The recommendation has been submitted by the industry to the government,” Shukla said, explaining that the NPS had previously enjoyed this benefit over and above the Rs 1.5 lakh limit under the old tax regime, which has now been removed.
He stressed that reinstating this incentive would encourage more people to open NPS accounts and broaden participation in pension schemes.
Shukla highlighted ongoing reforms in the pension sector, noting that fund managers are now allowed to create multiple schemes tailored for different cohorts, such as women or working adults, with the aim of rapidly scaling up participation. He also flagged significant changes to withdrawal rules under the new framework.
On distribution, Shukla said banks remain the largest last-mile channel for pension products such as Atal Pension Yojana (APY) and NPS, helping reduce selling costs due to their multi-product offerings. However, he noted that low retirement awareness remains a major challenge, urging early financial planning for post-retirement needs.
The CEO emphasized the need for greater flexibility compared to the Employees’ Provident Fund (EPF), especially for long-term investors, and highlighted the importance of equity investments to protect against inflation. He added that regulators now allow investments in commodities such as silver and gold.
Digital processes, Shukla said, are central to scaling up, enabling paper-free onboarding in minutes using Aadhaar and CKYC. Expanding coverage among self-employed and gig workers is seen as a major growth opportunity, supported by distributor incentives.
India’s pension industry currently manages assets worth approximately Rs 15 lakh crore, expected to double to Rs 30 lakh crore by 2030. Axis Pension’s assets under management (AUM) stand at nearly Rs 15,000 crore, with plans to cross Rs 50,000 crore by FY27-28, up from Rs 8,800 crore last year.
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