27 January 2023
Dear All, What IT act says about double tax deduction on the same income. Salary income added in salary and again Perquisite(PF/SA/NPS- Employer contribution is over and above 750000/-) what is the implication of it.
27 January 2023
Sir, NPS is added in Gross salary as income and where Perquisite (PF employer contribution) is more than 750000 than again the NPS contribution over and above will be taxable???
27 January 2023
In respect of employer’s contribution toward NPS account of an employee, deduction under Section 80CCD (2) is available to an employee. This is over and above the deduction of Rs. 1.50 available under Section 80 C, 80CCC and 80 CCD(1) taken together. The deduction under Section 80CCD (2) is available upto 10% of the basic salary and dearness allowance of the employee. For the Central and State government employee a higher deduction of 14% of contribution as percentage of basic salary is available. Though there is no overall limit for deduction in respect of employer’s contribution towards NPS account of an employee under Section 80CCD (2) but Section 17(2) of the Income Tax Act provides that in case aggregate of employer’s contribution towards employee’s employee provident fund, National Pension System and Superannuation exceeds seven lakhs fifty thousand in a year, the excess shall be taxed as perquisite in the hands of the employee. So effectively an employee can claim deduction upto Rs. 7.50 lakhs for employer’s contribution to his NPS account in a year. So, the deduction u/s. 80CCD(2) is available for the perquisites. But more than 7.50L is naturally taxable.
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