BENEFITS FOR TAX SAVING OF NATIONAL PENSION SCHEME
PARMOD KUMAR (CHARTERED ACCOUNTANTS) (29 Points)
08 February 2016BENEFITS FOR TAX SAVING OF NATIONAL PENSION SCHEME
Vishal Goel
(Chartered Accountant)
(1688 Points)
Replied 08 February 2016
Section 80CCD provides for Income Tax deductions for contributions made to the notified Pension Scheme of the Central Govt i.e. for contribution to the National Pension Scheme (NPS). Deduction under this Section is only available to Individuals and not to HUF’s.
Earlier the deduction allowed for contribution to NPS was limited to Rs. 1 Lakh [Sub Section 1A of Section 80CCD]. However, with a view to encourage people to contribute towards NPS, the maximum amount allowed to be invested in National Pension Scheme has been increased from Rs. 1 Lakhs to Rs. 1.5 Lakhs.
Moreover, in the Budget 2015 – a new sub-section 1B has also been introduced so as to provide for additional deduction in respect of any amount paid, of upto Rs. 50,000 for contributions made by any Individual assessees under NPS.
This additional benefit of Rs. 50,000 is over and above the benefit of Rs. 1.5 Lakhs allowed to be claimed as a deduction under Section 80C. Therefore, now the total deduction that can be claimed under Section 80C + Section 80CCD = Rs. 2 Lakhs.
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