What is Section 80CCD 1B/of Income-tax Act?
What is Section 80CCD 1B/of Income-tax Act?
Section 80CCD of the income tax act deals with deductions offered to individuals contributing to the NPS. The additional deduction of Rs. 50,000/- under Section 80CCD(1B) is available to assess over and above the benefit of Rs. 1.50 Lakhs available as a deduction under Sec 80CCD(1).
Is 80CCD 1B allowed in new tax regime?
90,000 is allowed u/s 80C and employee’s contribution of Rs. 60,000 to NPS is allowed u/s 80CCD(1). The amount of Rs. 50,000 is allowable u/s 80CCD(1B)….Section 80CCD Deduction in current and New Tax Regime.
| Particulars | Current Regime | New Regime |
|---|---|---|
| : Deduction u/s 80CCD(1B) | 50,000 | – |
| : Deduction u/s 80CCD(2) | 1,40,000 | 1,40,000 |
| Total Income | 11,78,000 | 14,28,000 |
What is the maximum deduction available u/s 80CCD 1B?
Rs 50,000
(ii) 80CCD (1b): This is an additional deduction for a maximum of Rs 50,000 which is over and above section 80C….STORY OUTLINE.
| Deduction under section | Maximum amount available |
|---|---|
| Section 80CCD (1b) | Rs 50,000 |
| Section 80CCD (2) | 10% of basic salary Rs 12 lakh: Rs 1.2 lakh |
Who is eligible for 80CCD 1B?
Synopsis
| Amount contributed | Deduction under Section 80CCE (max Rs 1.5 lakh) | Deduction under Section 80CCD (1B) (max Rs 50,000) |
|---|---|---|
| Individual taxpayer contributes Rs 2 lakh to NPS through employer (as deduction from salary) | Available | Available |
| Individual taxpayer contributes Rs 2 lakhs to NPS directly | Available | Available |
Who can claim 80CCD 1B?
To encourage investment in NPS, Section 80CCD(1B) of the Income-tax Act allows an additional deduction of Rs 50,000 over and above the Rs 1.5 lakh available under Section 80CCE. *It is assumed that contribution to NPS by the employee does not exceed 10% of the employees’ salary.
Who can claim 80CCD 2?
The tax benefit under section 80CCD (2) of the Income-tax Act can be availed only if the employer is willing to contribute to the NPS account of an employee. If the employer is willing, then using this route, investment in NPS account will exceed Rs 2 lakh in financial year.
What is 80CCD 2 of Income Tax Act?
(iii) 80CCD (2): Employer’s contribution to an employee’s Tier-I NPS account, where maximum contribution up to 10% of employee’s salary (14% in case of central government employee) is allowed in a financial year. This deduction is allowed under the new tax regime as well.
What is Section 80CCD about?
1. What is Section 80CCD? Section 80CCD relates to the deductions available to individuals against contributions made to the National Pension Scheme or the Atal Pension Yojana . Contributions made by the employers towards the NPS, also come under this section. NPS is a notified pension scheme from the Central Government. 2.
Can I claim tax deduction under Section 80CCD(2)?
Section 80CCD (2): Salaried employees also gets the tax benefit on employer contribution to his or her NPS account. The contribution made by the employer up to 10 per cent of salary (Basic plus Dearness Allowance) can be claimed as a deduction from the taxable income under Section 80CCD (2) of the Income Tax Act,1961.
What is Section 80C of income tax?
Section 80C of Income Tax is one of the tax saving sections of the Income Tax Act that allows tax deductions upto INR 1,50,000 on investments.
What is the Section 80C deduction of Income Tax Act?
Tax deduction under section 80C can be claimed by an individual or a member of a Hindu undivided family (HUF) upon investments and approved expenses. In other words, only the investment and expenses that one makes as an individual or on behalf of HUF, will be considered for the deduction purposes of this section.