QUERY

I have been contributing Rs 50,000 per year in NPS Tier 1 Account to claim tax benefit under sec 80CCD (1B) since March 2016. My Tier 2 account was never active. Can I now start contributing additional Rs 1,50,000 in same Tier 1 Account to get benefit of section 80C / 80CCD(1) by paying entire Rs 2,00,000 in one stroke? Please clarify.

OPINION

 Yes, by depositing Rs. 2, 00,000, in NPS Tier-1 account, you can claim-

1. Deduction up to Rs 1,50,000 u/s 80CCD(1)
2. Addition deduction up to Rs 1,50,000 u/s 80CCD(1B)

PROFESSIONAL’S CORNER

1. The maximum limit of deduction available under Section 80CCD is Rs. 1,50,000
2. However, new amendment to the Section 80CCD has been done by the Union budget 2015 as sub-section 1B. Under the new section 80CCD, individuals can claim an additional deduction of Rs. 50,000.
3. This has thereby raised the maximum deduction available under Section 80CCD to Rs. 2,00,000.
4. Tax benefits under Section 80CCD (1B) can be claimed over and above the deductions available under Section 80CCD (1).
5. The maximum limit of deduction available under Section 80CCD is Rs. 2,00,000; this includes the additional deduction of Rs. 50,000 available under sub-section 1B.6.
6. Tax benefits availed under Section 80CCD cannot be claimed again under Section 80C, i.e. the combined deduction under Section 80C and 80CCD cannot exceed Rs. 2,00,000.