”This is a significant announcement to bring state government employees on par with the central government employees and this will help state government employees getting extended social security benefits in line with their counterparts in the union government,”said Supratim Bandyopadhyay, chairman, Pension Fund Regulatory and Development Authority

New Delhi:

Union Finance Minister Nirmala Sitharaman on Tuesday said that the state government employees’ tax deduction limit has been increased from 10 per cent to 14 per cent.

“To provide equal treatment to both Central and State government employees, tax deduction limit on employer’s contribution to National Pension System (NPS) account of State government employees to be increased from 10 per cent to 14 per cent, bringing them at par with central government employees,” Sitharaman said while presenting her fourth Union Budget in the Parliament.

She said that at present, the Central government contributes 14 per cent of the salary of its employee to the National Pension System (NPS) Tier 1 while such deduction is allowed only to the extent of 10 per cent of the salary in case of employees of the state government.

Sitharaman said that this would help in enhancing the social security benefits of the state government employees.

”This is a significant announcement to bring state government employees on par with the central government employees and this will help state government employees getting extended social security benefits in line with their counterparts in the union government,”said Supratim Bandyopadhyay, chairman, Pension Fund Regulatory and Development Authority (PFRDA).

Ajit Kumar, chief strategy officer, KFintech, said “The announcement around NPS on the Union Budget 2022 brings parity between central and state government employees NPS contribution. Now even state govt employees can enjoy higher retirement benefits as State Govt will contribute 14% instead of 10% to NPS. Further, we wish the same was extended to non-govt employees too.”