Tax bill exempts pension payouts, extends Saudi investment benefits

This Bill amends the Income-tax Act, 1961, and the Finance Act, 2025, to provide tax exemptions for payouts from the Unified Pension Scheme to government subscribers, extend tax benefits to investments by Saudi Arabia's Public Investment Fund, and clarify rules for abating pending tax assessments in search cases.

Subscribers to the Unified Pension Scheme (government employees), the Public Investment Fund of Saudi Arabia and its wholly owned subsidiaries, and taxpayers involved in pending assessment or reassessment proceedings related to search or requisition cases.

• Exempts up to 60% of the individual corpus paid from the National Pension System Trust to Unified Pension Scheme subscribers upon superannuation, voluntary retirement, or specific rule-based retirement.
• Exempts lump sum amounts received by Unified Pension Scheme subscribers as per specific Department of Financial Services notifications.
• Adds the Public Investment Fund of Saudi Arabia and its wholly owned resident subsidiaries to the list of 'specified persons' eligible for tax exemption on income from investments in India (dividends, interest, capital gains).
• Specifies that amounts transferred from an individual corpus to a pool corpus upon retirement are deemed not received for tax purposes under Section 80CCD.
• Clarifies that pending assessments, reassessments, or recomputations for assessment years within a block period abate (are cancelled) on the date a search is initiated or a requisition is made, or when a notice is issued for other years in the block period.

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