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Summary: NPS comes with multiple tax-saving provisions, but their availability depends on which tax regime you're under. A reader asks whether the extra Rs 50,000 NPS deduction works under the new regime and the answer is simpler than you might think.
I fall under the new tax regime. Can I claim tax benefits on an additional investment of Rs 50,000 in NPS under Section 80CCD? – Anonymous
No, the Rs 50,000 extra deduction in NPS (National Pension System) is not available under the new tax regime. It is available only to those who have opted for the old tax regime.
However, there is still a way to claim a tax benefit under the new tax regime. If your employer contributes to your NPS account, you can claim a deduction under Section 80CCD(2). Do note that the exemption is capped at 14 per cent of your basic pay and dearness allowance.
Summary of tax benefits on NPS investments
This is for all taxpayers, irrespective of whether they have opted for the new or old tax regime
|
Section
|
Investment method | Maximum tax exemption limit (Rs) | Available under |
|---|---|---|---|
| 80C | Self, including salary deductions (employee contribution) | 1.5 lakh | Old tax regime |
| 80CCD (1B) | Self (employee contributions through salary deductions can also be included) | 50000 | Old tax regime |
| 80CCD (2) | Salary deductions (employer's contribution) | Old tax regime: 10% of basic pay and DA (14% for government employees) New tax regime: 14% of basic pay and DA (for all employees) |
Both old and new tax regimes |
Also read: Don't make this mistake with NPS
This article was originally published on January 15, 2025, and last updated on April 28, 2026.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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