I want to know the benefit of an NPS contribution to the extent of 10 per cent of my salary deductable from taxable income. Is this applicable only to government employees? Can you elaborate under which sections of the Income Tax Act are such benefits available to non-government employees?
-Keshav Kumar
This is a new section – 80CCD(2) – effective 1st April 2012, which gives a benefit to the National Pension System (NPS). This is quite a huge advantage, under which the employer’s contribution of up to 10 per cent of the employee’s basic salary to the NPS is exempt from tax. There is no ceiling to this benefit, and it is available over and above the 80C benefit that you already get. This benefit is available to government as well as non-government employees. Hence, if you are at the liberty of structuring your salary, this could be a huge concession for you.
This article was originally published on May 03, 2012.
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