N. Avinashilingam, Chartered Accountant, Coimbatore

From: Avinashilingam N avinash48@gmail.com
To: BudgetTwentyTen@gmail.com
Date: Tue, Feb 9, 2010 at 11:48 AM
Subject: Budget wish list

The Government may announce a National Pension Fund. This Fund may be administered like Public Provident Fund. Individuals may be allowed to contribute a maximum amount of Rs. 6 lacs per financial year to the Fund. The contribution may be allowed 100% deduction from taxable income. Interest may be credited at 8% p.a.. After the person attains 60 years or at any age later than 60 years opted by the person, monthly pension may be paid. The pension amount may be calculated at 8% p.a. of the corpus fund standing at his credit. The corpus fund may be repaid to the nominee after his death. All contributions to the fund upto Rs.6 lacs per financial year may be allowed as deduction from taxable income for the year. All interest credited to the account until the person chooses to draw pension may be exempted from income tax. The corpus fund repaid to nominee may be exempted from income tax. Once the person opts to receive the pension, the pension amount may be taxable. Where the pension amount exceeds Rs. 3 lacs per year, income tax may be deducted at 10% of the pension amount. In western countries, social security scheme is there to take care of Senior Citizens. As there is no such social security scheme in India, individuals may be allowed to create a pension fund with tax break while they are earning. Government will be able to mobilise sizable resources from such a fund due to tax break available. All individuals who save through this fund will be able to receive regular pension from Central Government to take care of their expenditure after retirement.