The Hindu Business Line : Pension plan limit stays at Rs 10,000

The Budget fine print reveals that the investment limit in pension plans offered by insurance companies is unaltered at Rs 10,000. These plans may not enjoy the luxury of the expanded limit of Rs 1 lakh allowed for investments/expenditures that could be claimed as a deduction from income.

Interestingly, pension plans are the only investment avenue where specific limits continue to apply.

With the Finance Minister, Mr P. Chidambaram, stating in his speech that investments in any of the specified instruments will not be governed by any ceiling, it was widely perceived that the limit of Rs 10,000 on pension plans would also go. That has, however, not been the case.

An abolition of the investment limit would have given investors the choice to funnel higher investments into pension plans to provide for a more meaningful sum in their post-retirement years. For those who rejoiced at this prospect, the Budget may have merely flattered to deceive.

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