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Finance Minister Nirmala Sitharaman on Tuesday proposed to increase tax deduction limit from 10% to 14% on employers contribution to National Pension System (NPS) account of state and Central government employees.

The move is to bring parity between employees of states and central government and to enhance social security benefits.

Announcing income tax related changes, Sitharaman said, "to provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year."

“We have deeply realized the benefit of the latest provisions for the taxpayer community. One better scheme is for the tax deduction limit which is now hiked to 14% on the employer's contribution to the NPS account of the state government employees. And the updated return filing provision is much better than the previous with the time bracket of 2 years at maximum to the end of the assessment year. To add a delight, the tax benefits to the startups have been offered redemption of taxes to the 3 consecutive years is now extended to one more year," said Amit Gupta, MD, SAG Infotech

Further, the co-operative surcharge will be reduced from 12% to 7%.

The Finance Minister has also proposed to tax any income from transfer of any virtual digital asset at 30%.

No deduction in respect of any expenditure or allowance will be allowed while computing such income, except cost of acquisition, Sitharaman said.

The National Movement for Old Pension Scheme (NMOPS), an umbrella body of more than 14 lakh central and state government employees, has written to Union Finance Minister Nirmala Sitharam and Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh demanding 'one nation, one pension' scheme.

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