Budget 2024: The National Pension System (NPS) in India is at the centre of demands for significant reforms by salaried taxpayers. According to Personal Finance experts, there is a growing consensus among taxpayers for critical changes, including increasing the additional income tax deduction limit under Sec 80CCD 1B. Additionally, there is a call to raise the tax-free withdrawal limit at maturity, aligning it with other retirement savings instruments like EPF.
What changes do salaried taxpayers want in NPS from FM Nirmala Sitharaman when she presents the first Budget 2024 under the Modi 3.0 regime?
Siddharth Maurya, Founder and MD of Vibhavangal Anukulakara, advocates raising Sec 80CCD 1B limit from ₹50,000 to ₹1 lakh, offering potential savings of up to ₹15,600 for those in the 30% tax bracket.
Ashish Aggarwal, Director at Acube Ventures, also supports increasing Sec 80CCD(1B) deduction from ₹50,000 to ₹1 lakh to bolster retirement savings.
Siddharth Maurya calls for raising the tax-free withdrawal limit at maturity from 60% to 80%, aligning with EPF taxation standards.
Gaurav Singh Parmar, Associate Director at Fincorpit Consulting, advocates raising the tax-free withdrawal limit at maturity from 60% to 80% to increase the attractiveness of NPS.
Siddharth Maurya urges flexibility in premature withdrawals for critical life events without penalties. He also seeks higher equity exposure beyond the current 75% cap for better returns.
Siddharth Maurya pushes to introduce guaranteed return options akin to schemes like PPF within NPS.
Siddharth Maurya calls for restructuring to enhance the attractiveness of short-term savings.
Abhishekh Soni, CEO and Co-founder of Tax2win, advocates for higher tax benefits, including potential increases in contribution limits and improved withdrawal flexibility under NPS.
Abhishekh Soni proposes raising the employer's NPS contribution deduction limit from 10% to 12%, aligning it with PF contribution exemptions.
Abhishekh Soni suggests introducing an additional ₹50,000 deduction under the new tax regime for NPS.
These proposals aim to make NPS more attractive and beneficial for retirement planning, addressing taxpayers' evolving needs and expectations nationwide.
According to a report by The Times of India, discussions are underway to address payout disparities for central government employees covered under the National Pension System (NPS). It is anticipated that these employees may soon receive 50% of their last drawn pay as pension. This initiative follows Finance Minister Nirmala Sitharaman's announcement of a committee chaired by Finance Secretary TV Somanathan to explore this proposal.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
