The Finance Bill, 2020 (Budget 2020) has proposed certain Income-Tax related amendments to the employer sponsored Retirement Plans in India as below:
A - Aggregate employer contributions in excess of INR 750,000 per annum made by the employer to the schemes below will be considered as income in the hands of the employee and subject to income/perquisite tax.
The schemes covered within this proposal are:
- Provident Fund
- The National Pension Scheme (NPS)
(or referred to in sub-section (1) of section 80CCD)
- Approved Superannuation Fund
B - Additionally, the annual accretion by way of interest/returns on such taxable contributions will also be subject to tax in the hands of the employee.
To download presentation explaining the potential implications of the above amendment on both employers and employees and Aon’s Point of View on the same, please fill in the details below: