Tax Benefits

 

Tax Benefits

 

Tax benefit Under NPS Tier-I

After 60 years when he will be mature then if total amount is more than 5 lakh and 60-40 ratio will be there. Then 60% will be tax free and 40% will be taxable.

Tax Benefit available to Individual:

Any individual who is Subscriber of NPS can claim tax benefit under Sec 80 CCD (1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE. Up to 20% of Gross Income for self-employed within the overall ceiling of Rs. 1.50 Lacs under Sec. 80 CCE.

Exclusive Tax Benefit to all NPS Subscribers u/s 80CCD (1B)

An additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act. 1961.

 

Additional Tax Benefits

 

Apart from tax benefits available under 80CCD, below are the other tax benefits available under NPS:

Tax benefits on partial withdrawal:

Subscriber can partially withdraw from NPS Tier I account for specified purposes. Amount received from partial withdrawal are tax exempt u/s 10 (12B) of Income Tax Act.

Tax benefit on Annuity purchase:

Amount invested in purchase of Annuity, is fully exempt from tax. However, annuity income that you receive in the subsequent years will be subject to income tax.

Tax benefit on lump sum withdrawal:

Upto 60% of the total corpus withdrawn in lump sum is exempt from tax.