Question
What is the revised NPS (National Pension System)
contribution limit for employers in the private sector as a percentage of an employee’s basic salary?ÂSolution
The NPS contribution limit for employers in the private sector has been raised to 14% of the employee’s basic salary. Details- • Previous Limit: Previously, the limit was 10% of the employee’s basic salary. • Applicability: This benefit applies to employees opting for the new tax regime. • Section 80CCD(2): The higher deduction up to 14% is applicable under this section, aimed at enhancing tax savings and building a larger pension fund. • Extension of Benefit: Earlier, the 14% employer contribution was only available to central and state government employees; it is now extended to private and public sector employees.Â
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