Salary for the purpose of nps

shyam (CA Final Student) (166 Points)

18 February 2017

Dear sir/Madam,

Please explain what items include salary for the purpose of NPS contribution calculation.

Also want to know whether DA portion of Transport allowance is includible.

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3 Replies

(Guest)

10% OF BASIC + DA

shyam (CA Final Student) (166 Points)
Replied 19 February 2017

Thank u for the reply.

Whether DA portion of Transport Allowance is also includible.

Anil Diwan (Professional) (83 Points)
Replied 19 February 2017

Dearness allowance of Transport allowance is not included in NPS. Its just basic + DA

Contribution routed through employer:

Investment up to 10% of Salary (Basic + Dearness Allowance) is deductible from taxable income u/s 80CCD (1) of Income Tax Act, 1961. There is no cap in terms of absolute value.

Contribution directly by employee:

Investment up to 10% of Salary (Basic + Dearness Allowance) is deductible from taxable income u/s 80CCD (1) of Income Tax Act, 1961 subject to 1.5 lakhs limit of section 80C
Additionally, investment up to Rs.50,000 is deductible from taxable income u/s 80CCD (1B) of Income Tax Act, 1961