Budget 2026: NPS Tax Exemption Limit May Double to Rs 1 Lakh

• Speculation suggests the government may increase the additional tax exemption limit under NPS from Rs 50,000 to Rs 1 lakh in Budget 2026.
• This potential change would offer a direct financial boost, especially for middle-income groups, allowing more tax-free savings and a larger pension corpus.
• Tax expert Rajarshi Dasgupta believes salaried employees, particularly those in higher tax brackets, would benefit significantly from reduced tax liability.
• The increased exemption could strongly encourage self-employed individuals, who lack EPF facilities, to engage in retirement planning, strengthening social security.
• Middle-income taxpayers earning Rs 8-15 lakh annually could save an additional Rs 10,000-Rs 21,000 in taxes if the limit is raised.

Why It Matters: Budget 2026 may double NPS tax exemption to Rs 1 lakh, boosting retirement savings and tax relief.