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NPS deduction when monthly deducted by employer

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Hari Kishore

37 Points Posted on 04 July 2021

As i have exhausted section 80C maximum limit of 1.5 Lac due to PF contribution, Tution fees, getting additional 50K through NPS in 80CCD(1B). Now, my new employer is having a monthly NPS deduction option from my salary, however HR confirmed that my employer does not do matching contribution. Can i get any additional benefits apart from 1.5Lac and 50k? or in 80CCD (2). I heard 10% of basic can be claimed to NPS over and above 80C and 80CCD(1B), please clarify

Replies (3)

Quick Summary

This discussion clarifies how individuals can claim additional tax deductions for NPS contributions made through their employer, even after exhausting the Section 80C limit. You can claim a further deduction under Section 80CCD(2) for employer contributions, up to 10% of your basic salary, in addition to the 1.5 lakh limit under 80C and the 50,000 limit under 80CCD(1B).

CA Raj Doshi

Practising CA

5649 Points Posted on 05 July 2021

Yes. You can get additional deduction under 80CCD(2) upto 10% of basic salary in addition to 1.5L and 50K in 80C and 80CCD(1B) respectively

Hari Kishore

37 Points Posted on 05 July 2021

Thanks Raj for timely response.

CMA Poornima Madhava

CMA

9106 Points Posted on 05 July 2021

You may avail deduction u/s 80CCD(2) up to 10% of salary on contributions from the employer. But the employer's contribution would be added to your income and then deducted.