I) On Contributions:
Employee’s own Contribution- Eligible for tax deduction under sec 80 CCD
(1) of Income Tax Act up to 10% of salary (Basic + DA) within the
overall ceiling of Rs. 1.50 Lacs under Sec. 80 C of the Income Tax Act.
From F.Y. 2015-16, subscriber will be allowed tax deduction in addition
to the deduction allowed under Sec. 80CCD(1) for contribution in his NPS
account subject to maximum of Rs. 50,000/- under sec. 80CCD ) .
Employer’s contribution: Up to 10% of Basic & DA (no upper monetary
ceiling) under 80CCD(2). This rebate is over and above 80 C. (This tax
benefit is only available for NPS subscribers).
II) Partial Withdrawal– Tax free
III) Lump sum Withdrawal– In case of superannuation, 40% of lump sum withdrawal is tax free.
IV) Annuity– Amount utilized for purchase of annuity is not taxable in the hands of the subscriber.
