ADDITIONAL DEDUCTION OF RS.50,000 IN NPS

[abbas mukhi]

DEAR EXPERTS,

IN BUDGET 2015, ADDITIONAL DEDUCTION UPTO RS.50,000 WAS ALLOWED AS DEDUCTION (SECTION 80 CCD (1B)

AS PER SECTION 80CCD (1) EMPLOYEE IS ALLOWED TO GET DEDUCTION UPTO 10% OF HIS SALARY IN THE PREVIOUS YEAR SUBJECT TO LIMIT OF RS.1,00,000.

MY QUERY :-

WHETHER ADDITIONAL DEDUCTION UPTO RS.50,000 (AS PER SECTION 80CCD (1B) IS ALLOWED ONLY TO THOSE EMPLOYEE WHO INVESTED UPTO MAXIMUM LIMIT AS MENTIONED IN SECTION 80CCD(1) OR ADDITIONAL DEDUCTION OF RS50,000 IS SEPARATE FROM DEDUCTION UNDER SECTION 80CCD (1) ??

IN OTHER WORDS, WHETHER IT IS POSSIBLE TO INVEST IN PPF RS.1,50,000 AND RS.50,000 IN NPS TIER 1 A/C (AS PER SECTION 80CCD (1B)

AI Summary

Clarification sought on additional Rs. 50,000 deduction under Section 80CCD (1B) for NPS alongside PPF investment. An individual inquired about the additional deduction of Rs. 50,000 under Section 80CCD (1B) introduced in the 2015 budget for the National Pension System (NPS). They sought clarification on whether this deduction is only available to those who have reached the maximum limit under Section 80CCD (1), which allows a deduction of up to 10% of salary, capped at Rs. 1,00,000. The question also asked if it is possible to invest Rs. 1,50,000 in the Public Provident Fund (PPF) and Rs. 50,000 in NPS Tier 1 under Section 80CCD (1B).