NPS benefits: Know all about National Pension Scheme tax benefits

NPS Tax Benefits: Only OCI and PIO card holders and HUFs are not eligible to open an account under this scheme.

NPS (National Pension Scheme) Tax Benefits: Under the National Pension Scheme (NPS), all Indian citizens and NRIs between age 18 and 60 years can invest and claim tax deductions of up to Rs. 1.5 lakh u/s 80C every year, and an additional Rs. 50,000 u/s 80CCD(1B).

All the tax benefits which are entitled to an inpidual are available only for investments in Tier I account.

Tax benefits under the NPS:

Any inpidual, who avails the NPS, can claim a deduction in tax up to 10 per cent of his/her gross income, which means the maximum deduction claimed can be within the limit of Rs 1.5 lac.

Exclusive tax benefits under Section 80CCD (1B):

* Section 80CCD relates to the deductions available for an inpidual under the contributions made to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY).

* Under the NPS, an inpidual can avail an additional deduction of up to Rs 50,000 for investment. This additional amount is over and above the deduction of the prior Rs 1.5 lac bracket.

Tax benefits for Corporate Sector:

* Benefits for a Corporate Subscriber:
An additional tax benefit, apart from the above two, can be availed by the subscribers under the Corporate Sector. Up to 10 per cent of an inpidual’s salary (Basic + DA) is deductible from the income which comes under the tax slab, without any monetary limit.

* Corporates:
Up to 10 per cent of an inpidual’s salary (Basic + DA) can be deducted as ‘Business Expense’ from their Profit and Loss Account.

To make sufficient investment to avail the tax benefit, a subscriber can approach a Service Provider under the entities known as Points of Presence (PoP-SP) or visit the to make an additional contribution in their account.