NPS contribution by employer rebate under 80ccd2

Employers contribution in nps has been increased to 14% from 10%  for central , state and bank employees ..

Earlier 10%contribution is exempted under 80ccd2

For now this rebate for private employees it is still 10% and for central govt this rebate is 14% under 80ccd2

Please tell what is status of rebate of employees of PSU or PSU banks. 

Replies (3)
Quick Summary
This discussion clarifies the NPS employer contribution rebate under Section 80CCD(2), particularly for PSU bank employees. While central government employees now benefit from a 14% rebate, PSU bank employees are currently eligible for a 10% deduction, similar to private sector employees. It also touches upon the tax treatment of NPS Tier 1 withdrawals at maturity, noting that up to 40% of the corpus withdrawn as a lump sum after age 60 is tax-exempt, regardless of initial subscription tax benefits.

Employees of PSU banks are not governmental employees; hence they are eligible only upto 10% deduction u/s. 80CCD(2) of IT act.

I am wondering how is the employees contribution to Tier1 account of NPS taxed on maturity, especially the amount exceeding the 80ccd2 / 80 C limits i.e. contributed out of effectively taxed income?

Once an investor turns 60, up to 60% of the corpus in Tier I accounts can be withdrawn as a lump sum. The remaining 40% has to be used to buy annuity products that will be used to pay post-retirement pension.

Whether assessee was able to claim any tax benefit at the time if subscripttion would be immaterial. After Subscriber attain the age of 60, up to 40 percent of the total corpus withdrawn in lump sum is exempt from tax.

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