Budget 2024 Expectations: The government may make some announcements in this budget to make the National Pension System (NPS) attractive. It is believed that the government can make NPS more attractive by giving relief in tax exemption and withdrawal rules.
Budget 2024 Expectations: This budget of the government will be the interim budget before the Lok Sabha elections. In such a situation, there is no possibility of any big announcement in this budget. There is little hope that the government will give any major tax relief or make any major announcements in this budget, but it is expected that in the budget the government may announce new changes regarding the pension system. Amidst the controversy regarding old and new pension, the government can make some announcements in this budget to make the National Pension System (NPS) attractive. It is believed that the Finance Minister can make such changes in NPS in this budget, which will provide relief to senior citizens as well as tax exemption to private sector employees. Regarding this, the pension fund regulator has also recommended some changes in NPS to the government.
Makeover of NPS
The government can makeover NPS in this budget. You can make changes in it and make it attractive. The Finance Minister can make some important changes in the National Pension Scheme in the budget announcement on 1st February to make it attractive. According to experts, the Finance Minister can make it attractive by adding options like increasing contribution for senior citizens above 75 years of age and adding tax benefits on withdrawal. It is believed that the government may take this step to make NPS attractive.
Private sector employees may get good news
Private sector employees may also get relief from the announcement of changes in NPS. Private sector employees will also get the benefit of PFRDA’s recommendations. If there are changes in NPS in the budget, then employees and employers will also get the benefit of 12 percent tax exemption instead of 10. In fact, pension fund regulator PFRDA has demanded EPFO-like tax rules on employer’s contributions. It is believed that the Finance Minister can make an announcement in this regard in the interim budget. Let us tell you that at present the tax rules on employer’s contribution are different for NPS and EPFO. Where in NPS, tax exemption is available only on the employer’s contribution to the employee’s fund up to 10 percent, which is 10 percent of basic salary and DA allowance. Whereas in EPFO, the total contribution of 12 percent to the employee’s fund gets tax exemption. There has been a demand for a long time to eliminate this tax difference. It is believed that the Finance Minister can eliminate this difference before the Lok Sabha elections.
Demand for tax exemption in the new tax regime
Employees demand that exemption on additional contribution to NPS should also be included in the new tax regime. People are demanding that even in the new income tax regime, people should get tax benefits on NPS contributions. It is worth noting that in the old regime of income tax, contributions up to Rs 50,000 in NPS get tax deduction under section 80CCD (1B). At the same time, the employees are demanding that this exemption available on Tier-1 account of NPS should also be included in the new tax regime.
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