80CCD(2) deduction limit, if 80C deductions of Rs.1,50,000/- is exhausted.

Originally posted by : rama krishnan

The maximum deduction allowed under 80c+80ccc+80ccd is 150000. under 80ccd(1b), maximum of 50000 can be claimed subject to the condition that the same is not claimed under 80ccd(1). 800ccd(2) is in respect of employer contribution and there's no limit to claim the same.

There is a misconception and confusion among many that there is no upper limit for sec 80CCD(2). However, some experts say the limit is the least of 3 conditions.

(1) Amount contributed by an employer,

(2) 10% of Basic+DA (For Central Government Employees it is now 14% of Basic+DA effective from 1st April 2019) 

(3) Gross Total Income.

Originally posted by : satya

One more point one shoud keep in mind while claiming deduction u/s 80CCD(2). You can claim 80CCD(2), only when Govt contribution is included in gross salary. Normally, some offices include govt contribition in gross salary in form 16 and give deduction u/s 80CCD(2) whereas other offices neither include govt contributuon in gross salary nor give any deduction u/s 80CCD(2). So, always check gross salary breakup before claiming 80CCD(2).

80CCD(1B) contribution by state government on behalf of its employees are also not included in gross salary. But deductions are allowed. 80CCD(2) and 80CCD(1B) are contradicting each other !!!! Are there any relevant sections which states employers contribution is part of salary, namely gross ?

Originally posted by : Jain JJ
	Originally posted by : satyaOne more point one shoud keep in mind while claiming deduction u/s 80CCD(2). You can claim 80CCD(2), only when Govt contribution is included in gross salary. Normally, some offices include govt contribition in gross salary in form 16 and give deduction u/s 80CCD(2) whereas other offices neither include govt contributuon in gross salary nor give any deduction u/s 80CCD(2). So, always check gross salary breakup before claiming 80CCD(2).80CCD(1B) contribution by state government on behalf of its employees are also not included in gross salary. But deductions are allowed. 80CCD(2) and 80CCD(1B) are contradicting each other !!!! Are there any relevant sections which states employers contribution is part of salary, namely gross ?

U/s. 17(1)(viii) ?

Section 80CCD(2) is fully independent of the Rs 1.5 lakh 80C ceiling. Even if your 80C is completely used up (PPF, ELSS, LIC, etc.), your employer NPS contribution is still deductible under 80CCD(2) up to 10% of your basic plus DA, with no absolute rupee cap. This deduction is available under the new tax regime too, which makes it one of the few employer-provided benefits that works regardless of which regime you choose. The three separate NPS deduction buckets (80CCD(1) inside 80C, 80CCD(1B) extra Rs 50k, and 80CCD(2) employer) are covered in this [NPS Section 80CCD deduction guide for AY 2026-27](https://taxgarden.in/blog/nps-tax-benefits-section-80ccd-deduction-guide-ay-2026-27).