NPS Employer Contribution

Ask the Community Payroll
1

Hello members,

Should I include my employer’s contribution to NPS in my taxable salary and calculate?

-Swati

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2

Employer’s contribution towards NPS contribution is not to be considered for tax purpose.

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3

Tax Benefits under the Corporate Sector:

  1. Corporate Subscriber:
    Additional Tax Benefit is available to Subscribers under Corporate Sector, u/s 80CCD (2) of Income Tax Act. Employer’s NPS contribution (for the benefit of employee) up to 10% of salary (Basic + DA), is deductible from taxable income, without any monetary limit.
  2. Corporates
    Employer’s Contribution towards NPS up to 10% of salary (Basic + DA) can be deducted as ‘Business Expense’ from their Profit & Loss Account.
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4

Hello,

Nps employer’s contribution is exempted to tax up to 10% of annual basic salary.

Ankur

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5

Hi everyone agree with all your discussions.

Yes! It can be claimed under the tax deductions for excemptions.

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6

Hi @Swati

Any payment made by your employer to your pension account is a part of your taxable salary.

For a payment to be considered as salary, an employer-employee relationship must exist. As per income tax act, taxable salary includes:

  • Pension
  • Taxable gratuity also.

Hence you can consider it during your IT filing.

Thanks,
Nisha

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7

@Swati

Employer Contribution to NPS is taxable. It is exempted under section 80CCD(2) based on the below conditions.

The contribution made by an employer shall also be allowed as a deduction under [section 80CCD(2)] while computing the total income of the employee. However, the amount of deduction could not exceed 14% of salary in case of central Govt. employees and 10% in any other employees.

*10% of salary in case of employees otherwise 20% of gross total income.

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