National Pension Scheme: Pension Fund Regulatory and Development Authority (PFRDA) Chairman Supratim Bandyopadhyay said about the changes regarding NPS-
National Pension Scheme: Pension Fund Regulatory and Development Authority (PFRDA) Chairman Supratim Bandyopadhyay said on Wednesday that the proposal to increase the tax deduction limit for state government employees to 14 per cent will give them an enhanced social security cover. In fact, the central government has proposed to increase the tax deduction limit for state government employees to 14 percent under the National Pension System (NPS). With this, the employees of the state government will be treated at par with the employees of the central government.
Employees will get benefits
Bandyopadhyay said, “This is an important announcement to bring state government employees at par with central government employees. This will help the state government employees to get an enhanced social security benefit.
Enhanced contribution to the budget The
central government currently contributes 14 percent of the salary of the National Pension System. It is allowed as a tax deduction in the income of an employee. Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget for 2022-23 in Parliament on Tuesday, proposed to increase the tax deduction limit on employer’s contribution to the NPS account of state government employees from 10 per cent to 14 per cent.
Benefit of Tax Exemption
NPS is administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA) established under the PFRDA Act, 2013. Employer’s contribution towards NPS Tier-I is eligible for tax deduction under section 80CCD(2) of the Income Tax Act (14% of salary for Central Government employees and 10% for others). This tax benefit is over and above the limit prescribed under section 80C.
