Are you also worried about the tax levied on your pension after retirement? If yes, the upcoming budget (Budget 2026-27) could bring you significant relief. The Pension Fund Regulatory and Development Authority (PFRDA), the regulatory body for the pension sector, has put forward certain demands to the government. If these demands are accepted, withdrawing money from the National Pension System (NPS) will not only become easier but will also eliminate the tax burden on your pocket.

This news related to the pension funds sector will directly impact your finances and retirement planning. PFRDA wants the money you withdraw at the time of retirement to be completely 'tax-free'.

Will the method of withdrawing money after retirement change?
In an exclusive interview with NDTV, PFRDA Chairman S. Raman expressed his expectations regarding the budget.

He stated that this time, a recommendation has been made to the government to make the options for withdrawing money from the National Pension System (NPS) even easier and tax-free. Currently, the rule is that you have to opt for an annuity at retirement, which has separate tax rules. However, PFRDA now wants new options like the Systematic Withdrawal Plan (SWP) to also be kept outside the tax net or made 'tax-neutral'.

This means that if an investor wants to receive their pension money differently, they shouldn't have to worry about taxes.

Choose your pension option according to your needs
In an exclusive interview he said that when choosing a pension option, an individual should not have to worry about how much tax they will have to pay. Consumers should choose their pension option based on their needs, not based on tax implications. This decision should be completely free from tax pressure.

NPS to reach the common man, target to connect millions of people
Chairman S. Raman emphasized that NPS is an independent voluntary contribution scheme based on market returns. This is why people in the private or non-government sector must participate in it. Currently, only 7.5 million people in the non-government sector are enrolled in the NPS, but the PFRDA aims to increase this number to tens of millions.  For this, the rapid expansion of the NPS in the non-government sector is essential.

To facilitate this, a new digital platform called 'Pensionbazaar' (Pensionbazaar.com) was recently launched in Gurgaon, which will help people open pension accounts from the comfort of their homes. According to the Chairman, pension scheme distributors in the country need to become more active so that people in every village and city can open their pension accounts.

Preparation for launching new pension products
Keeping in mind the needs of the common people, the PFRDA has also formed a special committee. This committee is researching what new pension payout products can be introduced in the market. As soon as the committee's report is submitted, the PFRDA will offer new and better options.

The Chairman says that when pension products are good and the tax burden is low, people will automatically be drawn to them. Currently, there are expectations from Budget 2026 that the government will make some major announcements for the pension sector. If these demands of the PFRDA are approved in Budget 2026, the future of NPS subscribers could become even more secure.

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