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Rebate u/s 80ccd(1b)

Gaurab jyoti Sandillya (Student) (5 Points)

28 January 2018

For the Financial year 2017-18,my employer deducted Rs 116000/- (u/s 80ccd(1)) as employees share of NPS(New pension scheme).I already invested as Rs 90000/- (u/s 80 c) as LIC premium.

So my total investment is Rs 206000(116000+90000).

Now can I show a maximum investment of Rs 200000/- (80c+80ccd(1)+80ccd(1b) by combining these 3 sections , without investing any thing more in NPS u/s 80ccd(1b).

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161231 Points)
Replied 28 January 2018

Yes, eligible.......

Rishi (NONE) (163 Points)
Replied 28 January 2018

Deduction U/s 80CCD(1B) IS available subject to Maximum of Rs.50,000.
And Deduction u/s 80CCD(1) IS AVAILABLE subject to Maximum 10% of salary (where salary =Basic +D.A(if considered for retirement benefit)+commission as fixed percentage of turnover(not monthly commission).

NOTE:80C+80CCC+80CCD(1) Are subject to Maximum limit of Rs.150000,while 80CCD(1B) is not under this limit.

In ur case ur contribution to NPS is Rs.116000
u should claim deduction u/s 80CCD(1B) for Rs 50,000 which is maximum.
Now for balance (116000-50000)U have to see that it is with in 10%limit of basic +da(if it is considered for retirement benefits)+Commission as a fixed percentage of turnover .

Only Upto 10% of salary as contribution id allowed ,Excess of 10%is not allowed.

If we assume that entire 66,000 is with in 10%of ur salary , then ur total investment u/s 80 C+80 CCD(1)comes to Rs.(90,000+66000=156000)
u will get only 150000 as deduction as I told u above.And ur Deduction u/s 80CCD(1B) Comes to Rs.50,000

Total deduction available = (50,000+150000)=200000

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Gaurab jyoti Sandillya (Student) (5 Points)
Replied 28 January 2018

Thanks for your reply. But I want to ask whether any circular or case law in income tax Act which describe my condition .since my actual investment in NPS is only Rs 116000/- and it is advised to rearrange this NPS amount of Rs 116000/- in different sections to get the maximum deduction of Rs 200000/-

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161231 Points)
Replied 29 January 2018

Extract from Page 33 of Salary_Circular_20_FY-2015-16.

as follows:

" 5.5.3 Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD):

Section 80CCD(1) allows an employee, being an individual employed by the Central Government on or after 01.01.2004 or being an individual employed by any other employer, or any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 National Pension System-NPS or as may be notifed by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites).

As per section 80CCD(1B), an assessee referred to in 80CCD(1) shall be allowed an deduction in computation of his income, of the whole of the amount paid or deposited in the previous year in his account under the pension scheme notified or as may be notified by the Central Government, which shall not exceed Rs. 50,000. The deduction of Rs. 50,000 shall be allowed whether or not any deduction is allowed under sub-section(1). However, the same amount cannot be claimed both under sub-section (1) and sub-section (1B) of section 80CCD."

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