National Pension System: Tax benefits of investing in NPS The ‘Tax Saving Season’ is back upon us. It is that time of the year when the HR department asks for proof of investments and employees start focussing on optimizing their tax liabilities and taking advantage of various avenues to save on income tax. One of the lesser-known but very important tax saving instruments is the National Pension System (NPS). Also Read: Gold Prices Are Rising: Should you buy now or wait? * By investing in the National Pension System, one can avail deduction of up to Rs 1.5 lakh under Section 80 CCD (1) of the Income Tax Act. * A further deduction of up to Rs 50,000 under Section 80CCD (1B) of the Income Tax Act is available exclusively for NPS investments. This is over and above the deduction of Rs. 1.5 lakh available u/s 80C of the I-T Act, 1961. * Further, “subscribers under Corporate NPS model can get additional tax benefits under section 80CCD (2) of the Income Tax Act on investment up to 10% of Basic Salary. This benefit is capped at Rs 7.5 lakh (including PF, Superannuation fund and NPS),” says Kurian. All the above tax-related exemptions are applicable to those who take benefits under the old income tax regime while the Corporate NPS model is applicable to those who take benefits under the new income tax regime. * Subscribers can claim tax deductions on NPS contributions as detailed earlier. * The second Exempt is applicable to contributions earning returns without any tax deduction. * Withdrawal (upto 60%) is also tax-exempt. “Purchase of the annuity product with the 40% of the corpus is also tax-exempt. Pension payouts from the investment in annuity is taxable at the applicable rate of the subscriber at the time of receiving the same,” informs Kurian. Individuals, therefore, would do well to understand the National Pension System and save on the exclusive tax benefits that it offers.
The launched works involve rehabilitating the Galgamuwa Railway Station and upgrading the railway line from Maho to Anuradhapura, including additional tasks. Another project is the second phase of track rehabilitation from Maho to Omanthai (128 kms), funded by a $318 million Indian Line of Credit.
Transport Minister Gunawardena praised the efforts of Indian company IRCON in Sri Lanka and called for more cooperation in the railway sector. State Minister Shantha Bandara and officials from the Sri Lankan Ministry of Transport attended the event.
Railways is a priority for Indian assistance in Sri Lanka, with over $1 billion invested under five Indian Lines of Credit. IRCON has been involved in Sri Lanks since 2009. It has contributed to the modernisation of Sri Lanka Railways by reconstructing the entire railway line network in the Northern Province (253 Km) and upgradation of the Southern line (115 km), as well as improving safety through advanced signalling and telecommunication systems.
Despite Sri Lanka’s debt standstill in April 2022, India’s support under various Lines of Credit has continued.
(With PTI inputs)