I am a government employee. My National Pension Scheme (NPS) contribution is ₹60,000 and other savings under Section 80C is ₹1.7 lakh. As my contribution is counted in section 80CCD(1), my account department is allowing me to claim a deduction of only ₹1.5 lakh. My question is: can I claim my NPS contribution under Section 80CCD(1B)? How much is the maximum deduction I can claim for the whole financial year?
- Vivek Kumar
The total tax deduction you can claim together under Section 80C and Section 80CCD is ₹2 lakh. You can claim a tax deduction of up to ₹50,000 on your contribution to National Pension Scheme (NPS) under Section 80CCD(1B). That means you can save an additional ₹1.5 lakh under Section 80C and Section 80CCD. If you claim your contribution of ₹10,000 to NPS (your actual contribution of ₹60,000 minus ₹50,000 claimed under Section 80CCD(1B) = ₹10,000) under section 80CCD(1), you can only claim ₹1.4 lakh under Section 80C.
This article was originally published on February 16, 2016.
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