Union Budget 2022: State government staff to get higher tax deduction benefit for NPS contribution

Currently, the Central Government contributes 14 percent of the salary of its employee to the National Pension System (NPS) Tier-I. This is allowed as a deduction in computing the income of the employee.

However, such deduction is allowed only to the extent of 10 percent of the salary in case of employees of the State government. To provide equal treatment to both Central and State government employees, the Budget has proposed to increase the tax deduction limit from 10 percent to 14 percent on employer’s contribution to the NPS account of state government employees as well.

| Budget 2022: Tax evaders not to get loss set off on undisclosed income