I have contributed around ₹25,000 this year in National Pension Scheme (NPS) through my employer contribution under section 80CCD(2). I have also made other investments in PPF, EPF etc under Section 80C. Recently, I have contributed ₹30,000 to NPS as a voluntary contribution. Is this eligible for deduction under section 80CCD(1B)?
- Atit
You can claim a deduction on your voluntary contribution. A taxpayer can make a voluntary contribution to National Pension Scheme (NPS) and claim an extra tax deduction of up to ₹50,000 under Section 80CCD(1B) of the Income Tax Act. Please remember that you can claim a total deduction of only ₹2 lakh under both Section 80C and 80CCD. However, the employer's contribution is not part of it and it is an extra deduction over and above this limit.
This article was originally published on February 12, 2016.
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