Contributio to nps

dear all,

my client has contributed to NPS  to the xtent of 47000/- which is shown in form 16. Besides, the client claims deduction under sec 80c to the extent of 150000/-(excluding the NPS amt).

1. can he claim the NPS deduction under sec 80ccd(1b) or it shd be covered under 80c.

 

pls clarify.tnx

Replies (3)

Yes he can claim u/s 80ccd(1B)

If contribution is made by your client then 80CCD (1B) can be claimed. If it is made by the employer then it should be claimed under 80C.

Some tax experts claim that employees covered by NPS can claim deduction for their mandatory contributions under the new Sec 80CCD(1b). “An employee’s mandatory contribution to NPS is eligible for deduction under Section 80CCD (1b)

This means taxpayers covered by NPS will not have to make additional investments to claim the new deduction. Other eligible tax-saving investments and expenses, such as PPF, 5-Year bank fixed deposits, home loan principal, children’s tuition fees, life insurance premium, NSCs and ELSS funds, can be claimed under Section 80C while the mandatory contribution to NPS can be claimed under Section 80CCD (1b).

If you have contributed Rs 50,000 or more towards NPS via salary deductions, maximize the tax benefits under both Section 80C and Section 80CCD(1b). Claim the full Rs 50,000 under the new section first and then adjust the residual to achieve total tax deduction of Rs 2 lakh

 

 

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