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section 80ccd(1b)

28 February 2019

please reply . can nps fund deducted in salary from employee side could be considered for 50000 extra savings under section 80 ccd(1b) . is this elegible for 2,00000 savings. or we have to deposit extra voluntary more 50000.please explain.

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CA. Umesh kumar (ca.umesh11@gmail.com) (1465 Points)
Replied 28 February 2019

Employee contribution is covered under section 80 ccd(1) which is a part of Section 80C (maximum 1.5 lac). Employer nps contribution is covered under section 80ccd(2) which is not a part of section 80c, You can claim additional 50,000 deduction under section 80ccd(1B), suppose you are covered under NPS, and your share of contribution is 1,70,000 for FY 2018-19 and you have no any investment/exp eligible for section 80C, then you can claim maximum 1,50,000 under section 80C (out of 1,70,000), Further you can invest voluntarily any amount under section 80CCD(1B) and claim deduction up to 50,000. therefore you can claim 2,00,000 deduction. Are you govt employee or self employed ???? may call me- CA umesh kumar- 9717597230. www.caserviceonline.com

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Naina Kapoor (Financial Consultant) (277 Points)
Replied 28 February 2019

NPS deduction of Employee comes under section 80 ccd(1) and is part of Section 80C upto 1.5 lakh.
Employer NPS contribution comes under section 80 ccd(2) which is not a part of section 80C.
You can claim 1.5 lakh under section 80c of income tax act and 0.50 lakh under section 80CCD(1B). Thus you can get income tax exemption of 2 lakh.

Antrika Sinha (student) (315 Points)
Replied 14 March 2019

Yes, nps fund deducted in salary from employee side could be considered for 50000 extra savings under section 80 ccd(1b), along with 80C contribution; but condition is same amount cannot be claimed twice.

P RAVI KUMAR (28 Points)
Replied 30 March 2019

SUPPOSE EMPLOYEE CONTRIBUTION IS 70000. EMPLOYEE SAVES 1.5 LAKHS IN PPF. NOW UNDER 80C THE PPF CONTRIBUTION IS SUFFICIENTLY COVERING. SO THE NPS CONTRIBUTION OF EMPLOYEE CAN BE USED FOR 80CCD1B. THE FACT MANY ARE NOT UNDERSTANDING THIS. THERE IS NOT ORDER ISSUED IN THIS REGARD. IN THE ACT IT IS CLEAR. BUT ON NSDL WEBSITE IT IS UNCLEAR. AMBIGUITY IS THERE. WITHOUT CONTRIBUTION 50000 MORE IN NPS, ONE CAN CLAIM 2 LAKHS SAVINGS. ONLY ONE HAS TO DO THAT HIS 80C IS COVERED BY SOME OTHER SAVINGS.

FURTHER EXPLAINING THIS TO THE DDO IS ALSO DIFFICULT. AS THEY COMMIT BLUNDER IN ISSUING FORM 16. WE HAVE TO INFORM ALL CLEARLY.