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

ITR 589 views 8 replies

Jain JJ

Student

36 Points Joined July 2022

If 80C deductions upto Rs.1,50,000/- has been exhausted under PPF investment. Can a govt. salaried employee (i.e. NPS subscriber whose contributions in NPS tier 1 account is paid by State Govt as an "employer share" along with his own "employee share") claim additional deductions under 80CCD(2) - "Contribution to pension scheme of Central
Government by employer". If yes,

Q.1) Then what's is the maximum limit of such deductions under 80CCD(2), if section 80C limit upto Rs.1,50,000 is exhausted.

Q.2) Are there any steps/calculation involved to derive such deduction amount under 80CCD(2)

Refer to Form 16 Pdf attached refer to Pt. (xiii)

Attached File : 3682408 20220710143814 80ccd2 1 .pdf downloaded: 40 times

Replies (8)

CA Rashmi Gandhi

Chartered Accountant

86505 Points Joined April 2011

1. No limit for 80CCD(2) same is for employer contribution

2. No

If your 80C limit exhausted then use balance deduction of 80CCD(1) in 80CCD(1B) maximum upto Rs. 50000

rama krishnan

12244 Points Joined May 2017

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.

Jain JJ

Student

36 Points Joined July 2022

Originally posted by : rama krishnan

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.

CA Rashmi Gandhi

Chartered Accountant

86505 Points Joined April 2011

Yes you are correct here.

satya

service

72 Points Joined January 2016

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).

Jain JJ

Student

36 Points Joined July 2022

Originally posted by : satya

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 ?

Jain JJ

Student

36 Points Joined July 2022

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 ?