I invested in NPS ₹50,000 but was a bit late in getting started. As a result, after opening the account with ₹2000, I invested the balance ₹48000 on March 30, 2016. However, NPS credited the amount to my account on April 4. Now, does this qualify as a tax deduction for year ending 31.3.2016? In my bank statement, it shows the amount debited on March 30, but in NPS statement, it shows the amount being credited on April 4.
- Siddharth Desai
Since you have made the payment before 31 March 2016, for taxation purpose you will still be eligible for the additional tax deduction of ₹50,000 for the financial year 2015-16. In NPS there might be a time lag between the time you make the payment and the credit of units to your NPS account. This time lag can go up to 15 working days for the initial contribution and up to 7 working days for the subsequent contributions. The date you make the investment is what counts.
This article was originally published on June 07, 2016.
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