Finance Minister Nirmala Sitharaman on March 24 said that a panel will be set up to look into the issues relating to the pension of government employees.
“I propose to set up a committee under the Finance Secretary to look into the issue of pensions and evolve an approach which addresses the needs of employees while maintaining fiscal prudence to protect common citizens,” she said while speaking on the Finance Bill 2023 in Lok Sabha.
FM Sitharaman said the approach will be designed for adoption by both the central government and state governments. She said that representations were received that the national pension system for government employees needs to be improved.
Following the passage of the bill, Finance Secretary TV Somanathan said the pensions committee will look into issues being raised by all quarters.
Reflecting on the changes to rules on debt fund investment, he said “Isn’t it interest , what do you get from debt mutual funds , is it share capital gains or do you get debt interest? We are looking at parity with instruments which are of a similar nature.”
Income earning instruments should be treated as income earning instruments, that is the direction in which it is going, he said.
Sitharaman's announcement on pension committee came on as she moved the Finance Bill 2023 in the Lok Sabha for consideration and passage. Lok Sabha passed the Finance Bill 2023 giving effect to tax proposals without debate amid ruckus by opposition members.
The bill was passed with several official amendments. Besides, 20 more sections have been added to the Bill.
As the Finance Bill was passed, Sitharaman also said the Reserve Bank of India (RBI) will look into the issues related to credit card payments for foreign tours not being captured under the Liberalised Remittances Scheme (LRS).
Also, the amended finance bill exempts pension fund investments from taxation under infrastructure investment trusts (InvITs). The new rule will be applicable to investments made on or after April 1, 2023.
At present, InvITs are subject to taxes in a similar manner to mutual funds. All income earned by the InvITs, such as dividends, rent, and capital gains, is subject to income tax. This tax is usually paid at the rate applicable to the investor, such as 10 percent for individuals and 30 percent for corporations.
