80CCD(2) deduction under new tax regime

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Under the new tax regime (Section 115BAC), the 80CCD(2) deduction for NPS contributions is capped at 14% of your Basic Salary plus Dearness Allowance (DA). If your Basic+DA is £15 lakh, 14% amounts to £2,10,000. Your employer can deduct this full amount for NPS, and you can claim the entire £2,10,000 as a deduction from your taxable salary income, with no further monetary limit beyond the 14% calculation.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)

23 October 2024 I have read that maximum 14% of salary (Basic+DA) is allowed as deduction u/s 80CCD(2). But is there a maximum amount of limit of the said deduction ? If my salary is 15.00 lac (Basic +DA) and 14% of which comes to Rs. 2,10,000/-. Whether employer can deduct 2,10,000/- as NPS on behalf of me ? And whether I can get deduction of 2,10,000/- from my salary income ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

23 October 2024 Yes. but the benefit of this amendment has been made applicable only to the taxpayers who are opting for the new tax regimes under Section 115BAC.

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Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)

23 October 2024 Of course sir. Applicable only under new tax regime. But maximum limit of benefit sir ?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

23 October 2024 No other cap except 14% of Basic+DA.

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