Pension Fund Managers for National Pension System

NPS Tax Benefits:

NPS account holders are at the advantage to tax benefit up to Rs. 1.50 Lac under section 80 CCD(1) and enjoys additional tax exemption up to Rs 50,000 under section 80CCD(1B).

1. Tax benefit for Individual NPS subscriber- An individual who is an NPS subscriber can avail the tax benefit u/s 80CCD (1).up to Rs. 1.50 Lakh.

2. Tax benefit for the NPS subscriber u/s 80CCD (1B) - For the NPS Tier I subscriber, an additional deduction of Rs. 50,000 is available for the investment u/s 80CCD (1B). This investment facility is available over the deduction amount of Rs. 1.5Lac u/s 80C of Income-tax Act, 1961.

3. Tax benefit for the corporate sector- NPS offers a tax benefit for the corporate and corporate individual as well who has subscribed to the scheme:

• Corporate individual/ subscriber: Further tax benefit is offered to the corporate subscriber subject to Income-tax Act u/s 80CCD (2). In the corporate, an employer can contribute up to 10% of the employee’s salary (basic + DA) i.e. from the taxable amount without any limit.
• Corporate: Employer can contribute to the NPS up to 10% of salary-Basic + DA as a business expense from the profit & loss account.

Additional NPS Tax benefits available except u/s 80CCD

NPS allows you as a subscriber to enjoy additional tax benefits apart from u/s 80CCD:

1. Tax benefit on partial withdrawal: NPS Tier-I account allows you to make the partial withdrawal i.e. 25% from own contribution with zero percent levied tax on it.

2. Tax benefit on Annuity purchase: Whatever amount is invested in the annuity purchase, it is free from tax. Though the received income in the subsequent years will be subjected to income tax.

3. Tax benefit on lump sum withdrawal: Once the subscriber attains 60years of age, up to 40% amount withdrawn in a lump sum is free from tax.

Features & Benefits of NPS