Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Your own contribution
Your personal NPS contribution is deductible under Section 80CCD(1), but it sits inside the overall ₹1.5 lakh 80C ceiling — so it competes with PF, LIC and ELSS. Over and above that, Section 80CCD(1B) gives an extra ₹50,000 deduction exclusively for NPS, beyond the ₹1.5 lakh. That extra ₹50,000 is the part most people specifically use NPS for.
The employer contribution
If your employer contributes to NPS, that is deductible separately under Section 80CCD(2) — up to 10% of salary (14% for government employees) — and does not count against your ₹1.5 lakh. Crucially, this is the one NPS deduction that remains available in the new regime. Confirm the current percentage limits per the Finance Act.
A worked example
Example (old regime): you invest ₹1.5 lakh in PF/ELSS (filling 80C) and ₹50,000 in NPS — you claim the full ₹1.5 lakh plus ₹50,000 under 80CCD(1B), a ₹2 lakh total. If your employer also puts 10% of salary into NPS, that is deducted separately under 80CCD(2). In the new regime, only the employer’s 80CCD(2) portion helps. Our team can structure it for your regime.