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

[Prakash and Thiagarajan]

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

NPS employer contribution limit under Section 80CCD questioned for deputed employee; whether full employer contribution qualifies. Whether employer contributions to the National Pension System by a public sector undertaking for an employee on deputation from the central government qualify for deduction at the higher rate previously applicable under central government employment, or are limited to the lower percentage allowed for contributions by persons other than the central/state governments under the income tax deduction provision.