I am a central government employee working in the Railways since January 2005. I have a compulsory NPS Tier I account with matching contribution from my employer. Moreover I am also contributing to NPS Tier II account voluntarily every month. From 2015-16, as announced in union budget, contribution of ₹. 50,000/- in a financial year in NPS would be eligible to tax rebate over and above existing ₹1,50,000/- limit under section 80C. So is my voluntary contribution to NPS Tier II account also eligible for the rebate?
- Amit Suri
Tier-II NPS accounts are not eligible for tax rebates. Only Tier I accounts are. Tier II NPS accounts are meant to an add-on savings account available to NPS account holders. You can make additional voluntary investments in Tier I account itself and earn the additional tax break on it. But remember, you cannot withdraw this sum until retirement.
This article was originally published on July 31, 2015.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
