GST Course
CA Final Online Classes
CA Classes

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

NPS Employer Contribution U/S 80CCD (2)

This query is : Resolved 

Dear Sir,

Please help me to understand NPS Contribution from Employer.

1. If One employer need to contribute NPS to their employees, what needs to be done for this ?
2. How to decide contribution amount ? Is there any limit ?
3. If one employee CTC is 5 Lakh, then Contribution amount is taken from 5 Lakh ? or Company contribute ?
4. Same will be reflect in Payslip ? I mean , this will show any component like NPS (Both earning and deduction side)
5. Tax Eligibility

Please help me to understand steps by steps.

Regards
Ratheesh

1) First, an account will be opened for the employee by the employer (similar to EPF) and the payment will be made by the employer to the account of employee
2) Usually 10% of salary is contributed by the employer
3) Yes, employer also will contribute equal share. However, employee can make voluntary contribution too.
4) Yes, as deduction in payslip
5) Employee's contribution up to 10% of salary u/s 80CCD(1) [max 1.5 lacs] and additional contribution up to 50k u/s 80CCD(1B) are allowable deductions.

Thanks Mam for your help. So my understanding is

-Employer has to get Registered for NPS and contribute to NPS Investments.
-Contribution amount need to show in deduction side like PF

And below are my queries

-10% of Salary Contribution means 10% of Gross ? 10% of Basic ?. Is this maximum limit ?
-Contribution amount is not taxable ? Since it showing only deduction side its not part of Gross income ?
-If only employer contribution, need to show in Payslip (as deduction) ?

Apart from that How to get registered ?

Awaiting your reply. Thank you so much for your immediate response.

Regards
Ratheesh

1) 10% of salary is basic (+ DA if applicable). This is the max limit for tax deduction.
2) Contribution up to the specified limit is an allowable deduction (as earlier mentioned) under Income Tax Act.
3) Employer's contribution will not be shown in the payslip but it will be part of CTC. Employer's contribution up to 10% of salary is not taxable.
4) Individuals can open an NPS account online: http://www.npstrust.org.in/content/open-your-nps-account-online



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


Similar Resolved Queries

loading





Trending Tags