Budget 2022: Tax deduction limit of state govt employees increased to 14%

Union Finance Minister Nirmala Sitharaman said that this would help in enhancing the social security benefits of the state government employees

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 today.

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.