Pension regulator PFRDA also suggests that employees of all sectors should get equal facilities on the tax front in NPS.
Pension scheme introduced for retirement planning is giving great returns to NPS investors. The attraction of this scheme of the central government is going to increase further. The benefits that the central government employees are getting in NPS, now all the same benefits will also be available to the state government, PSU and private sector employees.
The government can announce it in the upcoming budget. From the year 2019-20, central employees can take advantage of tax deduction under section 80C of the Income Tax Act by investing 24 percent of their basic salary and DA in NPS. In this, 10 percent of the employee and 14 percent of the central government are contributed. Whereas for other sector employees, this limit is limited to 20 percent. In this, both the parties contribute 10-10 percent.
Employees are not getting the benefit of tax deduction – 15 states and public sector banks of the country are demanding 14 percent contribution to their employees on their behalf. After getting the approval of the central government, PSU banks have increased their contribution to 14 percent in August, but the employees are not getting the benefit of tax deduction on the increased amount of four percent.
Pension regulator PFRDA also suggests that employees of all sectors should get equal facilities on the tax front in NPS. Private sector employees get the benefit of tax deduction on 24 percent contribution made by themselves and the company in EPF.
In this situation, discrimination against employees on investment in NPS cannot be justified at all. There is anger against the central government among lakhs of employees of the country regarding this issue. It is believed that in the upcoming budget, consideration is being given to remove this discrepancy. If the government takes steps in this direction, then the brightness of NPS will increase further.