Tax rebate likely on Universal Pension deposits

The government is taking steps to offer tax rebates on deposits for the Universal Pension Scheme in a bid to incentivise increased investment in the scheme.

The National Pension Authority has already sent a letter to the National Board of Revenue (NBR) requesting necessary action in this regard, official concerned said, adding that the board may issue an order in this regard by this week.

Once approved, taxpayers depositing for the scheme, launched in August this year, will receive a government-determined rebate on their applicable taxes.

Kabirul Ezdani Khan, chairman of the National Pension Authority, told The Business Standard that his office had already sent a letter to the NBR. "I hope the tax authority will approve it by the end of this week."

A senior tax official of the NBR, requesting anonymity, told TBS, "We know the pension authority has sent a letter. We will consider it positively when it reaches us."

Currently, tax rebates are available in investments in areas such as savings certificates, life insurance premiums, government provident funds, welfare funds, group insurance funds, superannuation funds, Deposit Pension Schemes (DPS) offered by banks and non-bank financial institutions, and investments in the capital market through primary or secondary shares, stocks, mutual funds, debentures of listed companies, and government-approved treasury bonds.

A taxpayer is entitled to get a tax rebate of 3% of the total income or 15% of the investment  in above-mentioned areas or Tk10 lakh, whichever is less, is considered as tax deductible.

According to the National Pension Authority, some 12,970 people have registered for the Universal Pension Scheme as of 17 September, just a month since the programme was launched on 17 August.

There are four different categories – Probash, Pragati, Surokkha, and Samata – under the Universal Pension Scheme.