National Pension Scheme ( Section 80CCD)
Deduction under this section applies to all the individuals who are employed under an employer. This Section provides the deduction for the amount of contribution to the schemes notified by Central Government i.e. National Pension Schemes & Atal Pension Yojana. There are two dedicated sub sections for the same purpose which is mentioned below:-
Section 80CCD (1)
It provides the deduction to an individual (both salaried and self-employed).
- For the Salaried individual, only 10% of his/her annual salary can be allowed as the deduction
- For Non-Salaried individuals, only up to 20% of the gross total income can be provided as deduction.
Note: – Here Salary means Basic + Dearness Allowance.
Section 80CCD (2)
It provides deduction to an employee only if his/her employer makes the contribution to employee’s account in the notified pension scheme. Deduction shall be allowed for the amount of contribution made provided it shall not exceed the amount of 10% of the salary.
- It applies to only salaried employees.
- Here salary means Basic + Dearness Allowance
- Deduction provided under the section 80C, 80CCC and 80CCD shall not exceeds Rs. 1, 50,000.
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