NPS Employer Contribution

Hello members,

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



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


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.


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



Hi everyone agree with all your discussions.

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

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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.




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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