Mita Basak
Quick Summary
Incentives to National Pension System (NPS) subscribers for state government employees 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 deductio
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FAQ :
The deduction limit for NPS contributions made by state governments to their employees' accounts under Section 80CCD has been increased to 14% of the employee's salary.
This amendment is effective retrospectively from 1st April, 2020.
The change applies to the assessment year 2020-21 and all subsequent assessment years.
The previous deduction limit for contributions made by employers other than the Central Government was 10% of the employee's salary.
The increase is to ensure that state government employees also receive the full benefit of the enhanced contribution by the state government, preventing additional tax liability.
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