Why NPS–
Tier 1 Account:
> Pension Account for retirement savings.
> Mandatory to open to join NPS.
> Withdrawal from this account is conditional.
> Tax deduction can be claimed on investment.
Tier 2 Account:
It’s normal account with no limit on withdrawal & no tax benefits.
Contribution routed through Employee directly
Employee can, additionally, contribute up to Rs.50,000 towards NPS which will be exempt from taxable income u/s 80CCD (1B) of Income Tax Act, 1961
Contribution routed through Employer
To the extent of 10% of Salary (Basic + Dearness Allowance) is exempt from taxable income of the employee u/s 80 CCD (2) of Income Tax Act 1961
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