National Pension System
J RAVI CHANDRA (GOVT) (32 Points)
05 November 2019
Is 14% contribution by employer fully tax free or restricted to 10%
5 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(185269 Points)
Replied 05 November 2019
Till now it is 10% only. May be amended to higher percentage in near future...
PHANEENDRA MALLA
(CA Practice)
(93 Points)
Replied 05 November 2019
Yes. Amendment is yet to be done for 14%. As of now, it is 10% only..
Kapadia Pravin
(17264 Points)
Replied 06 November 2019
NPS tax benefit
There is a deduction of up to Rs. 1.5 lakhs to be claimed for NPS – for your contribution as well as for the contribution of the employer.
– 80CCD(1) covers the self-contribution, which is a part of Section 80C. The maximum deduction one can claim under 80CCD(1) is 10% of the salary, but no more than the said limit. For the self-employed taxpayer, this limit is 20% of the gross income.
– 80CCD(2) covers the employer’s NPS contribution, which will not form a part of Section 80C. This benefit is not available for self-employed taxpayers. The maximum amount eligible for deduction will be lowest of the below: a. Actual NPS contribution by employer b. 10% of Basic + DA
– You can claim any additional self contribution (up to Rs 50,000) under section 80CCD(1B) as NPS tax benefit.
The scheme, therefore, allows a tax deduction of up to Rs 2 lakh in total.
There is a deduction of up to Rs. 1.5 lakhs to be claimed for NPS – for your contribution as well as for the contribution of the employer.
– 80CCD(1) covers the self-contribution, which is a part of Section 80C. The maximum deduction one can claim under 80CCD(1) is 10% of the salary, but no more than the said limit. For the self-employed taxpayer, this limit is 20% of the gross income.
– 80CCD(2) covers the employer’s NPS contribution, which will not form a part of Section 80C. This benefit is not available for self-employed taxpayers. The maximum amount eligible for deduction will be lowest of the below: a. Actual NPS contribution by employer b. 10% of Basic + DA
– You can claim any additional self contribution (up to Rs 50,000) under section 80CCD(1B) as NPS tax benefit.
The scheme, therefore, allows a tax deduction of up to Rs 2 lakh in total.
Kapadia Pravin
(17264 Points)
Replied 06 November 2019
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