Section 80CCD - Contribution to employees on Deputation - Perquisite?

[Ganesh S]

Dear Experts,

An employee is deputed from central government to central PSU. The employer contribution to NPS was 14% when he was drawing salary from central government. Hence, the PSU on deputation of the employee continues to contribute at 14%. However, as per Section 80CCD deduction is allowed only upto 10% for contributions made by a person other than Central/State Govt.

In the above scenario, since the employee is on deputation, can the PSU claim 14% deduction or only 10% deduction? Your views with any ciruclar/case laws would help.

Thanks.

AI Summary

Clarification sought on PSU's 14% NPS contribution deduction under Section 80CCD; experts needed to address 10% limit conflict. An employee on deputation from the central government to a central public sector undertaking (PSU) is receiving a 14% employer contribution to the National Pension System (NPS), consistent with their previous central government employment. However, Section 80CCD of the Income Tax Act permits deductions only up to 10% for contributions made by entities other than the Central/State Government. The query seeks clarification on whether the PSU can claim a 14% deduction or is restricted to 10%. Input from experts, including any relevant circulars or case laws, is requested to resolve this issue.