How NPS Will Be Taxed After Union Budget?

Finance Minister, Nirmala Sitharaman today announced a hike of 14% on the employer's contribution to the NPS account of the central & state government employees. Experts believe that it is a big positive move.

"We have deeply realized the benefit of the latest provisions for the taxpayer community. One better scheme is for the tax deduction limit which is now hiked to 14% on the employer's contribution to the NPS account of the state government employees. And the updated return filing provision is much better than the previous with the time bracket of 2 years at maximum to the end of the assessment year. To add a delight, the tax benefits to the startups have been offered redemption of taxes to the 3 consecutive years is now extended to one more year," CA Amit Gupta, MD & Co-Founder, SAG Infotech.

Gaurav Kapoor, Director & Co-Founder, Fincorpit Consulting Private limited, says the hike to 14% on the employer's contribution to the NPS account of the central & state government employees is a good step to ease the tax burden of the employees.

"The time limit extension to 2 years for return filing would alleviate the burden of the assesses and ITOs. However, we were expecting that the budget would enhance the limit of the standard deduction from Rs. 50,000 to Rs. 1,00,000 and WFH employees were also expecting some tax relief especially for them," he adds.