Contributions to National Pension System (NPS) u/s 80CCD(1B)

Sr. No. Questions Answers
1. Who is eligibile to claim deduction u/s 80CCD(1B) All individual assesses
2. What is the maximum amount of deduction eligible from total income Up to Rs. 50,000 paid during the year
3. Is the deduction forming part of Rs. 150000 limit as mentioned in Section 80CCE The deduction available u/s 80CCD(1B) is over and above Rs. 150000 as available u/s 80C, 80CCC and 80CCD(1)
4. Whether accruals/returns generated on contributions is taxable during accumulation phase No
5. Whether terminal benefits on exit or on superannuation is taxable 60% is exempt. However by purchasing annuity plan one can avoid income tax on balance portion also.
6. When to purchase annuity Plan In the same financial year in which terminal benefits received by assessee
7. Whether partial withdrawals from NPS is taxable 25% is exempt from tax.
8. Whether pension received from annuity plan is taxable Yes

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