Union Budget 2025: NPS contributions of up to Rs 50,000 to the National Pension System (NPS) under Section 80CCD(1B) qualify for deductions only under the old tax regime, and this benefit is not available in the new regime.
The government intends to entice people to switch to the new tax regime, which has lower tax rates but far fewer exemptions or deductions. Currently, contributions of up to Rs 50,000 to the National Pension System (NPS) under Section 80CCD(1B) qualify for deductions only under the old tax regime, and this benefit is not available in the new regime.
According to experts, this makes it even more imperative that the new tax regime permit the tax benefit for NPS contributions up to Rs 50,000 under section 80CCD (1B). They say that it is hoped the Union Budget 2025 will include this crucial and essential exemption in addition to those offered under the new tax system. This might persuade more people to switch from the previous tax system to the new one, since NPS is gradually gaining traction as a tool for retirement planning.
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