Budget 2022: FM Nirmala Sithraman brings parity in tax deduction limit in NPS for state, central employees to 14%

Finance Minsiter Nirmala Sitharaman on Tuesday increased tax deduction limit from 10 per cent to 14 per cent on the employer's contribution to the NPS (National Pension System) account of the state government employees. The mover will provide an “equal treatment to central & state govt employees”  she said in her nion Budget 2022 speech.

“At present the central government contributes 14 per cent of the salary of the employee to the National Pension System tier 1. This is allowed as a deduction in computing the income of the employee. However such deduction is allowed only to the extent of 10 per cent of the salary. In case of the employees of the state government to provide equal treatment to both central and state government employees, I propose increase tax deduction limit from 10% to 14% on the employer's contribution to the NPS account of the state govt. employees as well,” FM Sitharaman said.

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The FM today gave her third full budget speech in Lok Sabha.

The FM alsio said that the government will be undertaking major changes in the Income Tax rules.   

The FM also proposed Tax relief to persons with disability.

Among other tax related measures, Sitharaman propsed for reducing Alternate Minimum Tax Rate and Surcharge for Cooperatives.

One of the big announcements was also made in the cryptocurrency segments. Income from transfer of virtual assets to be taxed at 30 per cent.

 Better litigation management to avoid repetitive appeals.