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Deduction in respect of additional contribution in nps.
If A is an individual working as a govt servant. He deposits 60000 in NPS tier 1, 40000 in an insurance policy, 50000 in PPF account. He also wants to contribute additional voluntary contribution in 80CCD (2) of rs. 50000. How can he avail the benefit of that voluntary contribution? what is the process?
Replies (2)
AS per Section 80CCD(2) it is the employer (Central Government or other) who makes contribution in to the account of assessed referred to in 80CCD(1) (pension scheme).And such sum contributed is allowed to him U/s 80 CCD (2) that too with in the limit (10% of salary.).
Income tax laws allow tax deduction for contributions to NPS under three sections.
First, the employees contribution under Section 80CCD(1). This deduction is under the overall Rs 1.5 lakh limit under Section 80C.
Second, up to 10% of the basic salary put into the NPS by the company on behalf of the employee is deductible without any limit.
The third is the new Section 80CCD(1B) under which a taxpayer can claim deduction for voluntary contribution of up to Rs 50,000.
First, the employees contribution under Section 80CCD(1). This deduction is under the overall Rs 1.5 lakh limit under Section 80C.
Second, up to 10% of the basic salary put into the NPS by the company on behalf of the employee is deductible without any limit.
The third is the new Section 80CCD(1B) under which a taxpayer can claim deduction for voluntary contribution of up to Rs 50,000.
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