Additional deduction of Rs. 50,000 for TAX benifit under NPS

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  1. Viraj Vyawahare

    Viraj Vyawahare New Member

    I have read a lot of articles which mentioned that an additional deduction of Rs. 50,000 is allowed under 80 CCD (1B) for contributing under NPS scheme in excess of 1,50,000.

    What is not clear to me is when will contribution to NPS will be categorized as excess and considered for 80 CCD (1B).

    Scenario 1: I have already contributed Rs. 1,50,000 which accounts for 80C (PPF, LIC, etc.). I have also contributed 10% of my basic salary in NPS. Now, will any additional contribution in NPS will account for in 80 CCD (1B) up to 50,0000.

    Scenario 2: I have already contributed Rs. 1,50,000 which accounts for 80C (PPF, LIC, etc.). Now will any contribution to NPS which is below 10% of my basic will be considered towards 80 CCD (1B) or will the 10% of the basic will be considered in 80 CCD (1A) and any amount above that in 80 CCD (1B)

    Can anyone please throw more light on this as I have not seen any clarity on how the 1,50,000 and excess 50,000 considerations works out for NPS investment.
     
  2. A Venkateshwarlu

    A Venkateshwarlu New Member

     
  3. A Venkateshwarlu

    A Venkateshwarlu New Member

    Any amount above Rs.150000 (including 10% basic pay from employee contribution) by Voluntary contribution to the NPS A/C is considered under Sec. 80ccd(1b) (max. Rs. 50000) claimed for tax exemption.Total exemption is Rs. 200000.
     
  4. Viraj Vyawahare

    Viraj Vyawahare New Member

    Thanks Venkat. So if I have invested 1,50,000 using PPF, LIC, any additional contribution in NPS will be then considered for 80CCD(1B) till 50,000.
     
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