Budget 2025: Aurelia Menezes Highlights the Need for NPS Deductions

Posted On - 23 January, 2025 • By - King Stubb & Kasiva

As the nation eagerly looks ahead to Budget 2025, there is growing anticipation around potential reforms to the income tax structure, particularly regarding the National Pension Scheme (NPS). Aurelia Menezes recently commented in a recent article by News18, highlighting the disparity between the old and new tax regimes when it comes to NPS benefits.

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“The old income tax regime allows for a deduction of up to INR 50,000 for contributions made to the National Pension Scheme (NPS), which has led some taxpayers to prefer the old tax regime over the new one. While the new regime offers lower tax rates, it would be ideal for the budget to incorporate NPS deductions into the new regime to make it more appealing,” said Aurelia

With the existing tax framework, the additional deduction under Section 80CCD(1B) of the Income Tax Act has served as a critical incentive for taxpayers to contribute toward retirement savings through NPS. However, this benefit remains unavailable under the new tax regime. As discussions surrounding the budget unfold, experts and taxpayers alike are hopeful that the Finance Ministry will take steps to bridge this gap, creating an environment that supports long-term financial security and retirement planning.

Article: https://www.news18.com/business/petrol-diesel-fresh-prices-announced-check-rates-in-your-city-on-january-21-9195825.html