*Tax benefit of NPS(CPS)*
NPS (cps)tax benefits are available through 3 sections – 80CCD(1), 80CCD(2) and 80CCD(1B). All the tax benefits, annuity restrictions, exit and withdrawal rules are applicable to NPS ( cps)Tier-I account only. NPS (cps)Tier-II account is like an open ended mutual fund. You can take out the money at any time.
*Section 80CCD(1)*
Employee contribution up to 10% of basic salary and dearness allowance (DA) up to 1.5 lakh is eligible for tax deduction.
This contribution along with Sec 80C has 1.5 Lakh investment limit for tax deduction.
Self employed can also claim this tax benefit. However the limit is 10% of their annual income up to maximum of Rs 1.5 Lakhs.
*Section 80CCD(2)*
Employer’s contribution up to 10% of basic plus DA is eligible for deduction under this section.
Employer’s contribution is an additional deduction as it not part of Rs 1.5 lakh allowed under Section 80C.
It is also beneficial for employer as it can claim tax benefit for its contribution by showing it as business expense in the profit and loss account.
Self employed cannot claim this tax benefit.
*Section 80CCD(1B)*
Additional exemption up to Rs 50,000 in NPS(cpd) is eligible for income tax deduction.
Introduced in Budget 2015, fro FY 2015-16
Taxpayers in the highest tax bracket of 30 per cent can save Rs. 15,000 by investing Rs. 50,000 in the NPS. Those in the 20 per cent tax bracket can save aroundRs. 10,000, while people in the 10 per cent tax bracket can save Rs. 5,000 per year by investing in the NPS.
The additional tax benefit of 50000 is over and above the benefit of 1.5 Lakhs which can be claimed as a deduction under Section 80CCE.
It is irrespective of the type of employment. So, a government employee, a private sector employee, self employed or an ordinary citizen can claim benefit of Rs 50,000 under Section 80CCD(1B).
*Therefore, the total tax benefits that can be claimed for NPS under Section 80CCD(1) + Section 80CCD(1B) equals to 2 Lakhs for this financial year.*
If Employees have savings Rs. 1,50,000 under 80C excluding NPS or CPS Deductions, Then the Employee can show their NPS(cps) Deductions, under 80 CCD(1B), which is over the 1,50,000 Limit.
*If the Employee have less than 1.5 Lakh savings in 80C and exceeds 50,000 towards NPS(cps), then the Employee can split their NPS(Cps) Amount to 80CCD(1) and 80CCD(IB).*
Click Here..80 CCD clarification..
*Siva, leader.*
Tams Tirupattur blk.
*ALL Trs Tn Siva*
Tirupattur block
NPS (cps)tax benefits are available through 3 sections – 80CCD(1), 80CCD(2) and 80CCD(1B). All the tax benefits, annuity restrictions, exit and withdrawal rules are applicable to NPS ( cps)Tier-I account only. NPS (cps)Tier-II account is like an open ended mutual fund. You can take out the money at any time.
*Section 80CCD(1)*
Employee contribution up to 10% of basic salary and dearness allowance (DA) up to 1.5 lakh is eligible for tax deduction.
This contribution along with Sec 80C has 1.5 Lakh investment limit for tax deduction.
Self employed can also claim this tax benefit. However the limit is 10% of their annual income up to maximum of Rs 1.5 Lakhs.
*Section 80CCD(2)*
Employer’s contribution up to 10% of basic plus DA is eligible for deduction under this section.
Employer’s contribution is an additional deduction as it not part of Rs 1.5 lakh allowed under Section 80C.
It is also beneficial for employer as it can claim tax benefit for its contribution by showing it as business expense in the profit and loss account.
Self employed cannot claim this tax benefit.
*Section 80CCD(1B)*
Additional exemption up to Rs 50,000 in NPS(cpd) is eligible for income tax deduction.
Introduced in Budget 2015, fro FY 2015-16
Taxpayers in the highest tax bracket of 30 per cent can save Rs. 15,000 by investing Rs. 50,000 in the NPS. Those in the 20 per cent tax bracket can save aroundRs. 10,000, while people in the 10 per cent tax bracket can save Rs. 5,000 per year by investing in the NPS.
The additional tax benefit of 50000 is over and above the benefit of 1.5 Lakhs which can be claimed as a deduction under Section 80CCE.
It is irrespective of the type of employment. So, a government employee, a private sector employee, self employed or an ordinary citizen can claim benefit of Rs 50,000 under Section 80CCD(1B).
*Therefore, the total tax benefits that can be claimed for NPS under Section 80CCD(1) + Section 80CCD(1B) equals to 2 Lakhs for this financial year.*
If Employees have savings Rs. 1,50,000 under 80C excluding NPS or CPS Deductions, Then the Employee can show their NPS(cps) Deductions, under 80 CCD(1B), which is over the 1,50,000 Limit.
*If the Employee have less than 1.5 Lakh savings in 80C and exceeds 50,000 towards NPS(cps), then the Employee can split their NPS(Cps) Amount to 80CCD(1) and 80CCD(IB).*
Click Here..80 CCD clarification..
*Siva, leader.*
Tams Tirupattur blk.
*ALL Trs Tn Siva*
Tirupattur block
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