Is the tax exemption of ₹.50000 available on contributions to National Pension Scheme (NPS) is combined for investment under 1B and 1C or is ₹. 50000 for each? Can you clarify?
- Bhaskar
Your question is bit confusing. We are not aware of any sub-section 1C under Section 80CCD. We are offering you a general advice on how one can claim a tax deduction under Section 80CCD on contributions to National Pension Scheme (NPS). The employee's contribution is covered under Section 80CCD(1). The employer's contribution is covered under Section 80CCD(2). Please note that employer's contribution is an additional deduction as it not part of ₹1.5 lakh allowed under Section 80C. An individual can also contribute to NPS and claim an additional tax deduction of up to ₹50,000 under Section 80CCD(1B). In short, an individual can claim a total tax deduction of ₹2 lakh under Section 80C, 80CCE and 80CCD.
This article was originally published on February 10, 2016.
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