This NPS tax benefit can still be claimed under the new income tax rates
Live MintIf you want to switch to the lower income tax rates and new slabs announced in Budget for financial year 2020-21, you have to forego most of the deductions including the popular Section 80C. But some deductions, including employer contribution on account of employee in notified pension scheme under Section 80CCD, can still be availed if you opt for the new income tax regime. In the new income tax regime as announced in Budget 2020, there are seven tax slabs—zero tax for income up to ₹2.5 lakh; 5% for income between ₹2.5 lakh and up to ₹5 lakh; 10% for income between ₹5 lakh and up to ₹7.5 lakh; 15% for income between ₹7.5 lakh and up to ₹10 lakh; 20% for income between ₹10 lakh and up to ₹12.5 lakh; 25% for income between ₹12.5 lakh and up to ₹15 lakh; 30% for income above ₹15 lakh. However, in another income tax rule change proposed in Budget 2020, the employer's contribution exceeding ₹7.5 lakh in a year towards NPS, superannuation fund and EPF will be taxable in the hands of the employee.