2014 - 15 Onwards: Deduction 80CCD for NPS Upper Limit Rs. 1 Lakh only..!

Indian Income tax Section 80CCD(1) allows an employee, being an individual employed by the Central Government  on or after 01.01.2004, or / by any other employer , or / any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB & PR dated 22.12.2003 National Pension System (NPS) or / as may be notifed by the Central Government.

In Finance Act, 2014 , Finance Minister Mr. Arun Jaitly has increased the Overall Saving Limit for Section 80C, 80CCC and 80CCD(1) from Rs 1 lakh earlier to Rs. 1. 5 lakh  with effect from  financial year 2014-15.

But, many of ours may not aware of that the upper limit of Rs. 1.5 lakh is not available for contribution made by employee / Self employed in Contributory pension Scheme (CPF) /National Pension scheme (NPS) under section 80CCD for financial year 2014 - 15 onwards.

In Finance Act, 2014, an internal limit of Rs. 1 lakh has been fixed under section 80CCD(1).
So,  Central / State Government or / any other employee contributing to the NPS / CPF can claim maximum deduction of Rs. 1 lakh for financial year 2014-15 onwards .

However such person can claim deduction of Rs. 1.5 lakh through other scheme available under sections 80C like PF, PPF ,ELSS, NSC, Life Insurance Premium, 5 Year Bank Fixed deposit etc...

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