I am confused if NPS contribution is considered as deduction under section 80C of Income Tax Act.
I tried to go through 80C but the closest I could get is to
Section 80C (7) (c) "pension fund and subscripttion to deposit scheme referred to in clauses (xiiic) to (xiva);"
Referring to Section 88 (xiiic) as a contribution by an individual to any pension fund set up by any Mutual Fund notified under clause (23D) of section 10 or by the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), as the Central Government may, by notification in the Official Gazette, specify in this behalf;
So is NPS the trust under Section 88 (xiiic)? Can someone push me towards right direction please.
Following example shall simplify my query:
Client X has salary of 10,00,000.
X makes a deposit of 2,00,000 via going to NPS website.
X's employer does not contribute to NPS.
X did not make a any monthly contribution to NPS via his employer.
X has no other deduction under 80C like life insurance, ELSS, etc.
So in X's case what will be the right way to calculate deductions:
Scene 1:
| Particulars | Amounts |
|---|---|
| Income from Salary | 10,00,000 |
| Deduction u/s 80C | 1,50,000 |
| Deduction u/s 80CCD(1) | 0 |
| Deduction u/s 80CCD(1B) | 50,000 |
| Deduction u/s 80CCD(2) | 0 |
| Taxable | 8,00,000 |
Scene 2:
| Particulars | Amounts |
|---|---|
| Income from Salary | 10,00,000 |
| Deduction u/s 80C | 0 |
| Deduction u/s 80CCD(1) | 1,00,000 |
| Deduction u/s 80CCD(1B) | 50,000 |
| Deduction u/s 80CCD(2) | 0 |
| Taxable | 8,50,000 |
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