Tier-II NPS accounts are not eligible for tax rebates. Only Tier I accounts are
31-Jul-2015 •Research Desk
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.