Source: financialexpress.com
Contribution to National Pension System (NPS) account qualifies for deduction under Section 80 CCD of the Income Tax Act for both State and Central Government Employees
Contribution to National Pension System (NPS) account qualifies for deduction under Section 80CCD of the Income Tax Act for both State and Central Government Employees. Before Finance Act 2022, any contribution over 10% of salary to the NPS account of state government employees was taxable. In the case of Central Government Employees, there was no tax on contributions up to 14%. The Finance Act 2022 has ended this discrepancy.
The Central Board of Direct Taxes (CBDT) recently issued explanatory notes on the provisions of the Finance Act 2022, which explains how the tax treatment of NPS contribution is now the same for both state and Central Government Employees. This article looks at what the CBDT has said: