Budget 2026: NPS Tax Deduction Hike to Rs 1 Lakh - Who Benefits?

• Budget 2026 may increase the NPS tax deduction limit under Section 80CCD(1B) from Rs 50,000 to Rs 1 lakh.
• Salaried individuals, especially those in higher tax brackets, are expected to benefit most from reduced tax liability.
• A higher deduction specifically for the self-employed could significantly boost their retirement savings, as they lack EPF access.
• Middle-income earners (Rs 8-15 lakh annually) could save Rs 10,000-21,000 in tax from the incremental deduction.
• Experts believe an enhanced NPS limit will promote market-linked pension savings but not replace existing instruments like EPF, PPF, or insurance.

Why It Matters: A potential NPS tax deduction increase to Rs 1 lakh in Budget 2026 aims to boost retirement savings.