80CCD(2)

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SECTION-80CCD(2)

Ø the  DDO  is deducted 10% salary (Basic Pay+DA) of  every  CPS employees towards NPS Account through PRAN Number 

Ø Your employer (Govt contribution)  will calculate 10% of your salary(B.PAY+DA)  and then show it as contribution to NPS

Ø The point to note here is that the amount of 10% contributed by your employer (Govt contribution)   will be treated as salary under Section 17 and will form part of Form No 16 issued to you.

Ø the contributions made by your employer towards your NPS account qualifies for deduction under Section 80CCD (2) without attracting the limit of Rs 1.5  lakh laid down in Section 80 C

Ø example:

i)           Employee per annum CPS Deduction by DDO is Rs.60000/-       80CCD(1),80CCD(1B)

ii)         The same amount Rs.60000/- is contributed by Govt. (80CCD(2)

Now we can understand…..

80C+80CCC+80CCD(1)=80CCE=MAX RS.1,50,000/-

ADDITIONAL BENEFITS ABOVE 80CCE

1.  EMPLOYER CONTRIBUTION TO NPS u/s 80CCD(2)

2.  Employee Contribution to NPS u/s 80CCD(1B) Rs.50,000/-