Can Employee open NPS if not paid by Company

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  1. Dear Sir/s,

    I am in 30% tax bracket and I have joined Central Government service ( Autonomous body) in 1999 ( before 1-1-2004), I am covered under CPF ( no pension), Can I now enroll under NPS to get the benefit of Tax rebate under 80CCD (2) on deposit of 50,000 in addition to tax rebate of 1,50,000.i.e.; total rebate under 80C of Rs 2,00,000 ( 1,50,000 + 50,000).

    Thanking you,
     
  2. Sunil Tyagi

    Sunil Tyagi New Member

    Dear Mr Jois,

    I think you can open a new NPS account and claim benefit. I had earlier in day posted same query. please go through it at following link there are a few encouraging replies:

    http://www.forum.charteredclub.com/threads/deductions-under-section-80-ccd.3683/
     
  3. But it is written in Income tax of India site under Deductions at 16.,which is reproduced as below. http://www.incometaxindia.gov.in/pages/tax-information-services.aspx

    Also many a sites say that 80CCD(2) is for employers deposit. Please clarify.

    Thanking you,

    With effect from the assessment year 2012-13 section 80CCE is amended so as to provide that contribution made by the Central Government or any other employer to a pension scheme under sub-section (2) of section 80CCD shall not be included in the limit of deduction of one lakh rupees (Rs. 1,50,000 w.e.f. assessment year 2015-16) provided under section 80CCE.

    Following table demonstrates maximum deduction available in sections 80C, 80CCC and 80CCD with effect from assessment year 2015-16.

    From the assessment year 2015-16
    SectionMaximum deduction under relevant sectionCumulative maximum deduction [Sec. 80CCE

    Section 80CRs. 1,50,000Rs. 1,50,000
    Section 80CCCRs. 1,00,000
    Section 80CCD(1) (i.e., employee's contribution or assessee's contribution towards NPS)10% of "salary" [for a self-employed person : 10% of GTI] or Rs. 1,00,000, whichever is less
    Section 80CCD(2) (i.e., employer's contribution towards NPS)10% of salaryNot applicable
     
  4. Sunil Tyagi

    Sunil Tyagi New Member

    The table you posted is not visible. May be I am using safari it could because of that.
    The Section 80 CCD(2) is actually for employers; those employers who contribute to pension funds of their employee. This section is for employers to claim tax benefit under the scheme.

    For individuals applicable section is 80 CCD 1
     
  5. Parul_Gupta

    Parul_Gupta Active Member

    I agree with @Sunil Tyagi

    Section 80CCD(2) is for Employers Contribution.

    However, in case the employer does not contribute or if the person is self employed - they can themselves open a NPS Account and claim deduction for the same.

    The deduction under Section 80CCD is for everyone whether Employer contributes or not, whether in Service or Self Employed or Business.
     
  6. Parul_Gupta

    Parul_Gupta Active Member

    This additional deduction is not available for Assessment Year 2015-16 but would be available from Assessment Year 2016-17
     
  7. Parul_Gupta

    Parul_Gupta Active Member

    Moreover, in the table posted by you, deduction under Section 80CCD(1) is being considered whereas deduction under Section 80CCD(2) is not being considered.

    80CCD(1) is for Employees Contribution &
    80CCD(2) is for Employers Contribution

    Feel free to ask in case of any other query
     
  8. Malathi

    Malathi New Member

    Hi Akanksha,

    I have a query. Does 10% of basic salary restriction apply to additional 50,000 deduction towards NPS. Can you please confirm the following examples?

    1) An employee with 15,00,000 basic invests 2,00,000 in NPS. Can he claim 1,50,000 of NPS investment under section 80CCD (1) and 50,000 under 80CCD (1B)? Actually 10% of his basic salary is only 1,50,000.

    2) An employee with 10,00,000 basic salary invests Rs 1,50,000 in NPS and 50,000 in LIC. Can he claim Total LIC and 1,00,000 of NPS in section 80C and rest 50,000 of NPS as additional deduction i.e. 80CCD (1B). Actually 10% of his basic salary is only 1,00,000.

    3) An employee with 10,00,000 basic salary invests 1,50,000 in LIC and 50,000 in NPS. Can he claim additional deduction of 50,000 under section 80CCD (1B)?

    Many thanks in advance.
    Regards,
    Malathi
     
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