Section 80CCD:Contribution to Pension Scheme of Cental Govt./New Pension Scheme/Atal Pension Yojana
Eligible Assessee:
It is applicable to only Individual assessee
Eligible Amount of Deduction
For salaried Employee
- Employee Contribution xxx
- 10% of Salary xxx
Whichever is lower.
Other individual
- Assessee’s Contribution xxx
- 20% of Gross Total Income xxx
Whichever is lower.
Section 80CCD(1B): Under this section additional deduction up to Rs:50,000 shall be allowed other than contribution covered u/s 80CCD(1).
Example
Mr. Chitti Naidu contributed 1,40,000 towards National Pension Scheme and Gross total income is Rs:5,50,000 in this case, Chitti Naidu can claim 1,10,000(20% of gross total income) under section 80CCD(1) and remaining Rs:30,000 under section 80CCD(1B) or He can first claim U/S 80CCD(1B) of Rs:50,000 and remaining Rs:90,000 u/s 80CCD(1).
Section 80CCD(2)
- Employer contribution to National Pension Scheme for the benefit of Employee.
- employer’s contribution is first taxable under the head salary in hands of Employee and then gets deduction u/s 80CCD(2)
>> Employer Contribution xxxx
>> 10%/14% of Salary xxxx
Whichever is Lower.
Important Notes
- For the purpose of section 80CCD(1) and 80CCD(2) Salary means= Basic salary + Dearness allowance
- As per Sec 10(12A) any payment received by assessee on closure of his account is exempt to the extent of 60% (40% is Taxable) of total amount payable to him at the time of closure. In case of employee or Non employee any amount received from National Pension Scheme by the nominee legal heir on death of an assessee is fully exempt.
- The subscribers from recognised provident fund and superannuation funds would be able to transfer their corpus from these funds to National Pension Scheme without any tax implication.
- In case of partial withdrawal from National Pension Scheme by an employee, payment shall be exempt up to 25% of contribution made by him.
