Save More Tax Under New Regime with NPS via Employer—A Legal, Salary-Free Contribution Benefit

If you’re working and paying taxes under the new tax regime, there’s a smart way to save money on taxes — it’s called NPS via Employer. 

This benefit is available for both private and government employees, and it's completely tax-free within specific limits. If you're in the private sector, your employer can contribute up to 10% of your basic salary to your NPS account without it being taxed. For government employees, the limit goes up to 14%.

Let’s break it down with an example:
If your basic salary is ₹30 lakhs, and your employer contributes ₹3 lakhs to NPS, you save ₹90,000 in tax if you're in the 30% tax slab. All this without reducing your salary — because your company is making the contribution for you.

There’s no cut in your salary because your employer makes the NPS contribution on your behalf. You get a tax-free benefit while also growing your retirement savings, making it a win-win. Best of all, this is a completely legal and transparent method to save tax under the new tax regime (Section 115BAC).

If you're not already using this, now is the time to initiate the conversation with your HR or finance team. It’s one of the most efficient ways to grow your retirement fund while cutting down on taxes — all without spending a single extra rupee from your pocket.