Finance Minister Nirmala Sitharaman has presented the Budget 2024. Meanwhile, the Finance Minister has made many big announcements. Along with giving relief in income tax, the government has also announced the abolition of taxes like Angel One. Also, under the new tax regime, the tax slab has also been changed, which will save more tax than before. However, the government has also made a special change regarding NPS, which will affect the monthly budget of the employees.
What was announced in the budget regarding NPS?
FM Nirmala Sitharaman said in her budget speech on Tuesday, July 23 that the deduction under the National Pension System has now been increased. Now the employer will deduct 14 percent instead of 10 percent from the basic salary of the employees. This means that employees who earlier used to contribute only 10 percent to NPS will now have to contribute 14 percent.
Understand with an example, how much contribution will have to be paid for Rs 50,000?
If your basic salary is Rs 50,000 and you contribute to the National Pension System, then according to the earlier rule, you had to contribute Rs 5,000 per month, but now when the rule has changed and the contribution to NPS will be 14%, now on a basic salary of Rs 50,000, you will have to contribute Rs 7,000 every month, which will be deposited in your retirement fund.
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Monthly budget will deteriorate
It is often seen that the middle class manages their expenses very carefully. They manage everything from loans to household expenses and other expenses according to their salary. In such a situation, this change in NPS can spoil the monthly budget of the employees. However, on retirement, they can get more benefits than before.
How is it beneficial for pension?
If we understand this big change in NPS in clear terms, then now your company will deposit up to 14% of your salary in your NPS account every month, which will prove to be an increase in the pension you will get after retirement. At the same time, the government deposits 14 percent separately in your NPS account. In such a situation, now 4 percent more than before will be deposited in the NPS account. After maturity, employees can withdraw up to 60 percent of the entire fund deposited, while 40 percent can be spent on buying pension.