Sebi bats for tax breaks to attract pension money to market
- Hunt on for Malaysian Airlines: Stolen passports, missing debris fuels fears of foul play
- Raj Thackeray warms up to Narendra Modi, lets Sena feel the heat
- Rs 25,000 cr: CAG sees biggest ever J&K land scam
- UP BJP wants tickets for four riot-accused MLAs
- Haryana, Gujarat top industry-friendly states, Maharashtra among bottom five
Terming tax benefits necessary to attract pension money to the capital markets, Sebi has sought a clarity on taxation policy to be applied to retirement-focused funds to tap this huge pool of capital.
The total size of pension market in India is estimated to have stood at over Rs 1.5 lakh crore in 2010, while it is expected to rise to over Rs 2 lakh crore by 2015 and further to close to Rs 3 lakh crore in 2020 and more than Rs 4 lakh crore by 2025.
This includes individual retirement money, provident fund and other small savings and is based on a study conducted by a government-appointed expert panel.
However, the share of this vast capital pool is almost negligible in the equity markets, although a lot of foreign pension funds including from the US and Canada regularly invest in Indian markets.
Talking about steps required to attract pension money to markets, Sebi Chairman U K Sinha said a favourable taxation framework is crucial for achieving this goal.
"There are two angles here, one is that EPFO (Employee Provident Fund Organisation) money is not coming to the market and the trustees of the EPFO have refused to invest 15 per cent into equities which Finance Ministry has also allowed.
"That is something beyond Sebi's scope of working," Sinha said.
"The second issue is if others (fund houses) launch pension products, will such products get same tax treatment? The first draft of Direct Tax Code provided for that, but today there is an uncertainty that if a mutual fund launches a pension product, will it qualify for tax exemptions," he said.
"Right now, the answer is, it will not (get tax benefits)," Sinha said, while adding that an assurance of tax benefit is required for pension funds, irrespective of route taken to launch a pension product.
- Bengal model better than Modi’s Gujarat, says Didi
- Sindhis threaten to move HC if Sindhu Sagar not cleaned
- Three RTI activists whom Kejriwal paid homage are alive
- Poojary wins Mangalore primary
- Short change: Health cover for girl child at 50% discount
- Run with the bulls, don’t lose out to foreign investors again
- BJP boycotts NDTV over news gaffe | The Indian Express
- Out of the promised 50,000 homes for the poor, not even 50 constructed in Gujarat by BJP: Kejriwal
- AAP workers stage protest outside Kejriwal’s residence over ticket distribution
- BJP complains to EC against Rahul over RSS remarks, seeks derecognition of Congress