Corporate NPS: The one tax break the new regime didn't take away
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Corporate NPS remains a key tax break under the new tax regime.
- ✓Employers can put up to 14 percent of basic salary into NPS before tax.
- ✓Pranay Ranjan Dwivedi said, "The employer basically can invest up to 10 percent in the old tax regime and 14 percent in the new."
Story at a Glance
- Category
- Indian Markets
- Reported By
- MoneyControl
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
If you have moved to the new tax regime, you have given up most of the familiar deductions: Section 80C, HRA, and interest on a home loan for a self-occupied house. But one benefit has survived, and it can cut your tax bill sharply: your employer's contribution to the National Pension System (NPS). How it works Under corporate NPS, your employer puts part of your salary into your NPS account before it is taxed. Under the new regime, up to 14 percent of basic salary plus dearness allowance (DA) is tax-free. Under the old regime the limit is 10 percent. "The employer basically can invest up to 10 percent in the old tax regime and 14 percent of basic and eligible DA in the new tax regime," says Pranay Ranjan Dwivedi, MD & CEO, SBI Pension Funds.
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