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Tax rebate u/s 80CCD(2)

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Ajinkya Dubey

20 Points Posted on 28 April 2021

I parked in Rs. 50K voluntarily in an NPS fund on 31st March 2021 to claim IT rebate u/s 80CCD(2). The units were, however, allotted on 6th April 2021. The fund manager, therefore, says that the investment is in FY 2021-22, and not in FY 2020-21 (the last day of FY 2020-21 when I really invested).

Just an hour after I invested in the aforementioned NPS fund, I also invested in a mutual fund to claim an IT rebate u/s 80C. The certificate that I got from this mutual fund house says that the investment is in FY 2020-21. That means, it considered my investment date as the date when I transferred money to them (FY 20-21); and not the date when the MF units were actually allocated on 4th April 2021 (that extends to FY 21-22).

If the latter MF considered my investment date as to when I transferred the funds, why cannot the former NPS fund house consider it? Are they right in their approach? Shouldn't the investment date be the date when I transferred money to them for investment?

Replies (3)

Quick Summary

A user invested in an NPS fund on the last day of FY 2020-21 for an IT rebate under section 80CCD(2), but the units were allotted in the next financial year. The fund manager claims this makes the investment fall into FY 2021-22. This contrasts with a mutual fund investment made shortly after, where the certificate reflected the actual transfer date (FY 2020-21) despite unit allotment in FY 2021-22. The user questions why the NPS fund manager can't adopt the same logic, arguing the investment date should be when the funds were transferred.