The Ministry of Finance instructed the NBR to consider the money of the universal pension scheme as public investment and the benefit of tax concessions, and money received in pension is free from income tax.

The National Board of Revenue (NBR) will issue SRO soon as per the guidelines of the ministry; the ministry sources said this on Sunday.

According to NBR, the Sixth Schedule (Part-3) of the new Income Tax Act-2023 states that life insurance premiums, contributions to provident funds, contributions to recognized future funds, investments up to Tk 5 lakh in government securities or mutual funds, Tk 1.2 lakh per annum or Tk10⁹8⁸⁸ thousand per month investment in DPS and investment in the stock market will get a tax rebate or tax exemption on that money.

Read: Universal Pension Scheme: Just under 13,000 registered in first month

In this case, 15 percent of the amount invested in the mentioned sector or less than Tk10 lakh, will be tax exempted. However, the sixth schedule does not mention pension scheme contributions.

On the other hand, Section 14 (1) (d) of the Public Pension Management Act-2023 states that the pension contribution will be treated as an investment and considered for tax deduction and the amount received for monthly pension will be exempt from income tax.

Read: National pension scheme: ‘Probas’ program not attracting expatriates

However, Section 76 (2) of the Income Tax Act provides that if a person is exempted from tax by any Act or instrument deemed to be an Act other than the Income Tax Act, the person shall be taxed by notification of NBR irrespective of what is contained in that Act or instrument deemed to be an Act.

Unless exempted, that provision shall not be operative. Therefore, the Ministry of Finance took the initiative to include the matter in the Act.