Voluntary contribution to nps-tier1 account

Yes additional upto Rs. 50,000/- u/s 80CCD(1b)

Details are as follows:

Section 80CCD(1)

•  Employee contribution up to 10% of basic salary and dearness allowance (DA) up to 1.5 lakh is eligible for tax deduction.
• This contribution along with Sec 80C has 1.5 Lakh investment limit for tax deduction.
• Self employed can also claim this tax benefit. However the limit is 10% of their annual income up to maximum of Rs 1.5 Lakhs.

Section 80CCD(2) 

Section 80CCD(1B) ,

• Additional exemption up to Rs 50,000 in NPS is eligible for income tax deduction.
• Introduced in Budget 2015, from FY 2015-16.
• The additional tax benefit of 50000 is over and above the benefit of 1.5 Lakhs which can be claimed as a deduction under Section 80CCE.
• It is irrespective of the type of employment. So, a government employee, a private sector employee, self employed or an ordinary citizen can claim benefit of Rs 50,000 under Section 80CCD(1B).

Therefore, the total tax benefits that can be claimed for NPS under Section 80CCD(1) + Section 80CCD(1B) equals to 2 Lakhs for this financial year.

If Employees have savings Rs. 1,50,000 under 80C excluding NPS Deductions, Then the Employee can show their NPS  Deductions, under 80 CCD(1B), which is over the 1,50,000 Limit.

If the Employee have less than 1.5 Lakh savings in 80C and exceeds 50,000 towards NPS, then the Employee can split their NPS Amount to 80CCD(1) and 80CCD(IB).

Thank a lot for your quick response.

So at the time of tax filing I have show this right?. Since my employer wants my PRAN to be transfered to its associated POP-SP to consider this amount as tax exemption.

Also for financial year 2016-2017, till what date Can I invest in NPS account?

You can deposit till end of March, 2017 for exemption benefit for FY 2016-17.