Tax Benefit Under NPS

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As per Regulatory directions, schemes of MAX Life Pension Fund Management Limited will be discontinued w.e.f. 18-04-2025 Toll Free Number -1800 889 1030 of Atal Pension Yojana (New NPS-CRA toll-free number 1800 210 0080. The old number will be discontinued shortly.) Go Paperless Opt for an Email Annual Transaction Statement Protean CRA has migrated from https://enps.nsdl.com to https://enps.nps-proteantech.in ; Click Here for Aadhaar Seeding of APY Subscribers The CRA Transaction website shall migrate shortly from https://cra-nsdl.com to https://cra.nps-proteantech.in The NPSCAN Transaction website shall migrate shortly from https://npscan-cra.com to https://npscan.nps-proteantech.in Are you interested in undergoing online training on NPS/APY(including central/state/autonomous body subscriber), if so please Click Here As per PFRDA guidelines, contribution payment in NPS Tier II A/c through Credit Card is not permitted. Use other modes of payment such as Net Banking/ Debit Card / UPI for contributing in Tier II. You can view your NPS Transactions in Consolidated Account Statement (CAS) shared by your Depository i.e. NSDL and CDSL. To add NPS Transactions in your CAS, Click Here.

Tax Benefit Under NPS

1. What are the tax benefits of NPS?

Income Tax Act allows benefits under NPS as per the following sections:

On Employee’s contribution: Employee’s own contribution is eligible for tax deduction under sec 80 CCD (1) of Income Tax Act up to 10% of salary (Basic + DA). This is within the overall ceiling of Rs. 1.50 Lacs under Sec. 80 CCE of the Income Tax Act.
On Employer’s contribution: Up to 10% of Basic & DA (no monetary ceiling) under 80CCD (2). This rebate is over and above 80 CCE limit of Rs. 1.50 lacs.
Voluntary Contribution: Employee can voluntarily invest an additional amount of Rs. 50,000 (or more) to the NPS Tier I account and claim tax deduction on the same under section 80 CCD 1(B), subject to a maximum of Rs. 50,000.

2. Which document can a Subscriber use as investment proof in order to avail the tax benefit?

A copy of the Annual Transaction Statement (Tier I) can be used as investment proof in order to avail tax benefits.

3. Can a Subscriber get loan under NPS?

No. At present, a Subscriber cannot avail loan against NPS holdings.

4. Are NPS returns guaranteed?

There is no investment return guarantee. As per the present guidelines of Pension Fund Regulatory & Development Authority (PFRDA, the regulator for NPS), in case of government employees, contributions towards pension are invested by three Pension Fund Managers (PFMs), viz., LIC Pension Fund Limited, SBI Pension Funds Private Limited and UTI Retirement Solutions Limited as per the stipulated guidelines.

The returns under NPS are totally market based i.e. they are based on the NAV of the Pension Fund schemes. The benefits will entirely depend upon the amount contributed and the investment growth upto the point of exit from NPS.