At present, lump sum withdrawal of 60% does not come under the ambit of tax. There is a demand to provide tax rebate for investment in NPS under the new tax regime. Currently, under section 80CCD (1B), an individual’s contribution to NPS up to Rs 50,000 is eligible for deduction under the old tax regime.
NPS News: There are a lot of expectations from the salaried class from the interim budget presented by the government on 1st February. Along with changes in the tax slab, the employed people are also expected to increase the scope of 80C. Apart from this, this time the National Pension Scheme (NPS) can be made more attractive by increasing the tax rebate on investment and withdrawal for senior citizens above 75 years of age. Pension fund regulator PFRDA has requested for ‘parity’ in EPFO on the matter of taxation of contributions by employers. Announcements in this regard are expected to be made in the interim budget.
No need to file returns on income from NPS
As per Deloitte’s budget expectations, to promote long term savings through NPS and reduce the tax burden for senior citizens above 75 years of age, the annual portion of NPS will be tax free for investors. Rebate should be made. According to financial advisory and audit services company Deloitte, NPS can be clubbed with interest and pension to ensure that senior citizens above 75 years of age do not have to file returns on the income received from NPS. .
Discount up to Rs 50,000
At present, lump sum withdrawal of 60% does not come under the ambit of tax. There is a demand to provide tax rebate for investment in NPS under the new tax regime. Currently, under section 80CCD (1B), an individual’s contribution to NPS up to Rs 50,000 is eligible for deduction under the old tax regime. But not under the new tax regime. This is more than the tax rebate of Rs 1.5 lakh available under 80C in the old tax regime. Regarding government employees, the government had last year constituted a committee under the leadership of Finance Secretary TV Somanathan to review the pension system and suggest measures for its improvement. This committee has not yet submitted its report.
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