Incentives for state government employees on investment in National Pension System (NPS) subscribers

Incentives for state government employees on investment in National Pension System (NPS) subscribers

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Incentives for state government employees on investment in National Pension System (NPS) subscribers

 
 
There is an incentive for state government employees to invest in National Pension System (NPS) subscribers. Let us know about it.
 
 
  1. Under the existing provisions of the Act, any contribution by the Central Government or any other employer to the account referred to in section 80CCD of the Act (NPS account), shall be allowed as a deduction to the assesses in the computation of his total income, if it does not exceed 14% of his salary where such contribution is made by the Central Government. This limit is presently 10% of his salary where such contribution is made by any other employer. The State Governments were given an option to raise the contribution to 14% w.e.f 01.04.2019 on their own volition, based on their own internal approvals and notifications, without seeking the approval of the Pension Fund Regulatory and Development Authority
  1. In order to ensure that the State Government employees also get full deduction of the enhanced contribution by the State Government, it is proposed to increase the limit of deduction under section 80CCD of the Act from the existing ten per cent to fourteen per cent in respect of contribution made by the State Government to the account of its employee.
  1. This amendment will take effect retrospectively from 1st April, 2020 and will accordingly apply in relation to the assessment year 2020-21 and subsequent assessment years; so as to ensure no additional tax liability arises on any contribution made in excess of 10% during such time.

3 Comments

  1. February 3, 2022
    Shailendra priyadarshi

    Effect of amendment of 80ccd(2) on state psu like Bihar state power Holding company ltd.

    Reply
  2. February 3, 2022
    Shailendra priyadarshi

    Effect of amendment of 80ccd(2) on state psu like South Bihar power distribution company ltd

    Reply
  3. February 3, 2022
    CA MAHESH GARG

    Deduction of NPS (Employer Share) u/s 80CCD (2) retrocspectively allowed w.e.f. AY 2020-21. Now We can Revise ITRs only for AY 2021-22. How we can take benefit for AY 2020-21. Pls Explain

    Reply

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