CA. Abhishek Barnwal (Deputy Manager(Finance)) (32 Points)
23 February 2016Dear All
I want to get clarification on deduction u/s 80CCD of Income Tax Act. If the assessee has deposited an amount of Rs.60,000/- in the New Pension Scheme in the previous year then can he claim deduction for Rs.50000/- u/s 80CCD(1B) and balance Rs.10000/- u/s 80CCD(1)?
Also, is the cap of 10% of Salary applicable for section 80CCD(1B) too?
Kindly clarify as soon as possible.
Regards
Abhishek
Jayesh NP
(Tax Practitioner)
(178 Points)
Replied 23 February 2016
The Limit of 10% Salary is applicable for Sec 80CCD (1) and 80CCD (2). It is not applicable for 80CCD(1B).The maximum amount allowable u/s80CCD(1B) is Rs.50000. You can claim 50000 in 80CCD (1B) and Rs10000 in 80CCD (1)
Manjaly
(Business)
(82 Points)
Replied 23 February 2016
Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000. For FY 2015-16 (assessment year 2016-17) A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000.
SAMRAT DEY
(I.T.P.)
(32 Points)
Replied 24 February 2016
For Govt. employees who has joined service after 2014 there is a compulsory doposit in NPS maximum to 10% of Basic and DA and there are provision of Govt. contribution of same proportion. Own contribution is subjet to sec 80ccd(1) which falls u/s 80CCE i.e maximum to 1,50,000/ for the a/y 2016-17 and there is also provision of exempion of additional 50,000/- u/s 80CCD(1B) against deposit in NPS. My question is if a persion who joined service after 2014 has contributed NPS @ 10% of salary and also having deposited LIC,PPF,etc more than 1,50,000/, whether he can claim exemption u/s 80CCE 1,50,000/- against LIC,PPF,etc, and own contribution of NPS u/s 80CCD(1B) up to Rs.50,000/- all together Rs.2,00,000/- or for additional 50,000/ u/s80CCD(1B) he/she has to deposit additional 50,000/- other than his/her compulsory NPS i.e 10% of salary. Is the claim of NPS is optional 800CCD(1) or 80CCD(1B)?
Amit Kanunga
(Article Assistant and Post Gradute)
(644 Points)
Replied 24 February 2016
| Originally posted by : CA. Abhishek Barnwal | ||
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Dear All I want to get clarification on deduction u/s 80CCD of Income Tax Act. If the assessee has deposited an amount of Rs.60,000/- in the New Pension Scheme in the previous year then can he claim deduction for Rs.50000/- u/s 80CCD(1B) and balance Rs.10000/- u/s 80CCD(1)? Also, is the cap of 10% of Salary applicable for section 80CCD(1B) too? Kindly clarify as soon as possible. Regards Abhishek |
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Employee's contribution – Section 80CCD(1)
Allowed to an Individual who makes deposits to his/her NPS account. Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self employed) or Rs 1,00,000 whichever is less.
The limit of Rs 1,00,000 has been increased to Rs 1,50,000 for financial year 2015-16 (assessments year 2016-17).
Employer's contribution – Section 80CCD(2)
Maximum deduction available in respect of employer's contribution is allowed up to 10% of the salary of the employee.
For FY 2014-15 (assessment year 2015-16)
Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.
For FY 2015-16 (assessment year 2016-17)
A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000.
Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs 2,00,000.
From assessment year 2012-13, employer's contribution under section 80CCD(2) towards NPS is outside the monetary ceiling mentioned above.
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