New Delhi. Modi government will present its interim budget on 1 February 2024. There are many expectations from all sectors regarding this budget. In such a situation, it is expected that the concessional rate of tax on withdrawal of National Pension System (NPS) can be increased in the interim budget. The government can take some important decisions especially for senior citizens above 75 years of age.
Pension fund regulator PFRDA has sought “parity” with the Employees’ Provident Fund Office (EPFO) on the taxation front for contributions by employers. It is expected that some announcements in this regard are expected to be made in the interim budget.
Finance Minister Nirmala Sitharaman may present the interim budget on 1 February. This will be his sixth budget.
This is the hope regarding NPS
At present there is a disparity in the contribution of employees and employers. In NPS, 10 percent tax exemption is given on basic salary and dearness allowance. Whereas, in case of EPFO it is 12 percent.
Deloitte As per budget expectations, to promote long-term savings through NPS and reduce the tax burden for senior citizens above 75 years of age, the annuity portion of NPS has been made tax free for holders from the age of 75 years onwards. should go.
Apart from this NPS can be included with interest and pension. This will ensure that senior citizens above 75 years of age do not need to file returns if they have NPS income. Currently, lump sum withdrawal of 60 percent is tax free.
There is also a demand to provide tax benefits for NPS contributions under the new tax regime.
Till now, an individual’s contribution up to Rs 50,000 to NPS under Section 80CCD (1B) is deductible under the old tax regime, but it is not under the new tax regime.
Committee formed for government employees
With regard to government employees, the government last year constituted a committee under Finance Secretary TV Somanathan to review the pension system and suggest measures for its betterment. The panel report is still awaited.
This committee will suggest whether any changes are necessary in the existing framework and structure of the National Pension System (NPS) applicable to government employees. This panel will suggest measures
