Friday 10 February 2017

New benefits to National Pension system subscribers - Budget 2017


 National Pension System (NPS) – partial withdrawal (upto 25%) is now fully exempted from tax, Now the Non –salary /self-employed individual will get deduction of contribution made in NPS upto 20% of salary as against 10% earlier.

Ø National Pension System (NPS) – partial withdrawal (upto 25%) is now fully exempted from tax.

Current Provision
Proposed Provision –Budget 2017
Payment from National Pension System (NPS) trust to an employee
on closer of his account or opting out shall be exempt up to 40% of total amount payable to him.
partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and
conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under will exempt from Tax.



This benefit will be available on partial withdrawal made by NPS subscriber after 1 April 2017.



Ø Now the Non –salary /self-employed individual will get deduction of contribution made in NPS upto 20% of salary as against 10% earlier.



Current Provision
Proposed Provision –Budget 2017
Non- Salary Individual/ Self employed

Deduction under section 80CCD(1) of contribution made in NPS is allowed up to 10% of salary.

Salary Individual/Employee

Deduction under section 80CCD(1) of contribution made by employee in NPS is allowed up to 10% of Salary.

Deduction under section 80CCD(2) of contribution made by employer of behalf of employee in NPS is allowed up to 10% of salary.

Thus in case of employee, the deduction allowed under section 80CCD add up to 20% of salary.
Non- Salary Individual/ Self employed

Deduction under section 80CCD(1) of contribution made in NPS is allowed up to 20% of salary.

Salary Individual/Employee

Provisions in case of salary Individual remain the same.



Deduction with higher percentage of 20% will be available on contribution made by Non –employee individual in NPS after 1st April 2017.



No comments:

Post a Comment