Asso.prof.(commerce & Management) Pg
Hr Generalist

Hii All,
I need a little clarification in section 80CCD(NPS) under IT Act.We know that any contribution made under section 80CCD(1) is the contribution made by employee & thus comes under section 80C & hence, the maximum tax exemption availed is Rs. 1 lakh .(Would like to be corrected in case i am wrong).
However,if any payment is made by employer to NPS, then in comes under section 80CCD(2).My question is-
a) How much is the maximum permissible amount that can be contributed under 80CCD (not considering the tax emeption limit).
b) What is the tax exemption limit under 80CCD(2) ?
With Regds,
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Min Rs.500. Max - 10% of Basic + DA. This will be tax exempted if thru employer. Pon
Thank You Mr. Pon,
Then does it mean the full contribution of 10% Basic+DA is exempted. For instance if basic+DA pm is say 3 lakhs, i can save upto 10% of 3 lakh*12 months=3,60,000/- per annum in CCD)2 ?
The limit is 10% of basic+DA, no upper ceiling of the amount. If your basic+DA is 3,6L pa, the whole amount is exempted from I.T. That is the advantage of NPS thru employer. For CTC people, this is a good option to save substantial amount of tax.
Dear friends,
Here is an article attached on NPS for further study of this scheme. The NPS by itself a very good scheme especially who are in the high earning group say Rs.3 L + because of its uniqueness of addl. limit over and above the 80 C deduction. I think many of our friends and their employers are not aware of very existence of such scheme. It's high time every one should make use of this scheme to plan their future better. Pon is right in clarifying some issues to our friends.

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