Income Tax Section 80ccd

Salaried employees also gets the tax benefit on employer contribution to his or her nps account.

Income tax section 80ccd. Nps is a notified pension scheme from the central government. Section 80ccd of the income tax act 1961 focuses on income tax deductions that individual income tax assesses are eligible to avail on contributions made towards the new pension scheme nps and atal pension yojana apy. As per the central government you are allowed to take deductions with the help of this section and all the contributions made by you in these pension plans are also covered in this section.

The deduction under the section is available to both salaried individuals employed by the government or any other employer and self employed people. Meaning of section 80ccd of income tax section 80ccd helps you to enjoy deductions against the investment made in the national pension scheme and atal pension yojana. The deduction is limited to a maximum of 10 of salary basic dearness allowance only in case of salaried employees and 10 of gross income in case of self employed taxpayers.

The investments which qualify for deductions under 80c are listed below. Section 80ccd relates to the deductions available to individuals against contributions made to the national pension scheme nps or the atal pension yojana apy. The section 80ccd 1 along with section 80c has investment limit eligible for tax deduction as rs 1 5 lakhs.

Contributions made by the employers towards the nps also come under this section. As per section 80ccd 2 where any contribution in the said pension scheme is made by the central government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the central government or any other employer subject to limit of 10 of his salary of the previous year. Section 80cce provides that the aggregate amount of deductions under section 80c section 80ccc and section 80ccd shall not in any case exceed rs.

So he should make additional investment of rs 1 38 000 in section 80c to save maximum tax. In all he can save rs 2 lakhs tax u s 80c and 80ccd 1b. Further as per section 80ccd 2 the maximum limit is 10 of the salary.

1 50 000 on your taxable income from tax saving instruments and investments. Under section 80c of the income tax you are eligible to claim deductions up to rs. An individual or hindu undivided family huf is eligible to claim deductions under this section.