Higher Income Tax Deduction On NPS Likely For Private Sector Employees

Under the current income tax laws, if an employer is contributing towards the employee’s NPS account, a deduction up to a certain percentage of salary qualifies for income tax deduction

In the Budget 2021, tax experts expect the government to fix some anomalies in the NPS with regard to income tax benefits. They say that this will help in increasing the attractiveness of the National Pension Scheme.

“For contribution towards Tier I account up to 14% of the employer’s contribution is permitted for central government employees but when it comes to other employees maximum up to 10% of the contribution from employer is eligible for deduction under Section 80CCD(2). The government should introduce amendments to take care of these anomalies to make the scheme just and fair for each category of subscribers,” said Balwant Jain, an investment and tax expert.

Source: livemint

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