NPS subscribers can declare this earnings tax profit even after opting new regime
Income tax calculator: In the Union Budget 2020, Finance Minister Nirmala Sitharaman launched a brand new earnings tax regime, giving taxpayers an choice to decide on a tax slab that had decrease charges to pay. However, after opting this new earnings tax slab, the taxpayer needed to lose all earnings tax advantages like Section 80C, Section 80 CCD (1) and lots of extra deductions and exemptions which are round 70 in numbers. But, for these staff, whose employer is contributing to its National Pension System or NPS account, earnings tax deduction below Section 80 CCD (2) is out there even once they have chosen new earnings tax regime.
Speaking on earnings tax profit accessible for NPS scheme beneficiaries in new earnings tax regime; Pankaj Mathpal, Founder & CEO at Optima Money Managers stated, “Income tax deduction available for NPS subscribers under Section 80 CCD (2) of the income tax act, is on the employer’s contribution to one’s NPS account. Since, it is not a part of one’s annual income, NPS scheme beneficiaries can claim income tax deduction on its employer’s contribution to its NPS account, even after opting for the new income tax regime.” He stated that every one these staff whose employer has applied NPS scheme can declare this deduction even after selecting the brand new earnings tax regime.
On how a lot earnings tax deduction NPS subscriber can declare after selecting new earnings tax regime; Amit Gupta, Managing Director at SAG Infotech stated, “The new income tax regime allows a deduction under section 80 CCD (2) of the Income-tax Act, 1961, which is available if an employer contributes to an employee’s NPS account. The maximum deduction an employee can claim is 10 per cent of annual salary, where annual salary means basic plus dearness allowance (DA).”
The Managing Director of SEBI registered earnings tax resolution supplier firm went on so as to add that in new earnings tax regime, a taxpayer is allowed to assert earnings tax exemption on the conveyance allowance obtained to fulfill the conveyance expenditure incurred as a part of the employment as nicely.
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