Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

National Pension System

J RAVI CHANDRA (GOVT) (31 Points)

05 November 2019

Is 14% contribution by employer fully tax free or restricted to 10%

Reply
Follow
Share

5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160830 Points)
Replied 05 November 2019

Till now it is 10% only. May be amended to higher percentage in near future...

1 Like

PHANEENDRA MALLA (CA Practice) (93 Points)
Replied 05 November 2019

Yes. Amendment is yet to be done for 14%. As of now, it is 10% only..

Kapadia Pravin (17249 Points)
Replied 06 November 2019

NPS tax benefit

There is a deduction of up to Rs. 1.5 lakhs to be claimed for NPS – for your contribution as well as for the contribution of the employer.

– 80CCD(1) covers the self-contribution, which is a part of Section 80C. The maximum deduction one can claim under 80CCD(1) is 10% of the salary, but no more than the said limit. For the self-employed taxpayer, this limit is 20% of the gross income.

– 80CCD(2) covers the employer’s NPS contribution, which will not form a part of Section 80C. This benefit is not available for self-employed taxpayers. The maximum amount eligible for deduction will be lowest of the below: a. Actual NPS contribution by employer b. 10% of Basic + DA

– You can claim any additional self contribution (up to Rs 50,000) under section 80CCD(1B) as NPS tax benefit.

The scheme, therefore, allows a tax deduction of up to Rs 2 lakh in total.