Increase in amount allowed as deduction to non-government employers and their employees for employer contribution to a Pension Scheme referred in section 80CCD

Employer pension contribution deduction increased for employees under new tax regime from assessment year 2025-26.

Employer contributions to an employee's pension scheme will be deductible to the employer up to 14% of the employee's salary instead of the current 10%; contributions made by non government employers will also be deductible for the employee up to 14% of salary where the employee's pay is chargeable under the alternate tax regime. The amendments apply from 1 April 2025 for assessment year 2025 2026.