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Thread: if any strong order regarding NPS 80CCD

  1. #1
    Member venkeesai is on a distinguished road
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    Default if any strong order regarding NPS 80CCD



    hi to all

    Again this is from U.T.of Puducherry

    here my friends working in various Departments as new recruit. and they are under NPS.

    Nowthe problem is their NPS contribution is 10% of their Salary(B.Pay+G.P+D.A.).

    if a person's saving is below the Rs. 1,00,000
    is he can add other 10% of his Salary ? (U/s 80CCD) instead of NPS contribution by the employee?

    or what is the benefit of NPS for new recruits? please calrify me.

    thanks in advance
    Venkeesai

  2. #2
    Senior Member svsankar is on a distinguished road
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    Quote Originally Posted by venkeesai View Post


    hi to all

    Again this is from U.T.of Puducherry

    here my friends working in various Departments as new recruit. and they are under NPS.

    Nowthe problem is their NPS contribution is 10% of their Salary(B.Pay+G.P+D.A.).

    if a person's saving is below the Rs. 1,00,000
    is he can add other 10% of his Salary ? (U/s 80CCD) instead of NPS contribution by the employee?

    or what is the benefit of NPS for new recruits? please calrify me.

    thanks in advance
    Venkeesai
    Mr Venkeesai,
    The contribution under NPS 10% of the employee comes under 100000 limit under the section quoted by you. There is no provision of increasing the 10% subscription under Tier I. It has been proposed under NPS to introduce Tier II which will be like our GPF. Once the same is implemented an NPS subscriber can contribute any amount to the fund. You can however open an PPF account for making contributions in Nationalised Banks or Post Offices to increase your savings.
    The accumulations in Tier I at the time of retirement 40% will be refunded to the employee and 60% invested in an insurance fund to pay pension. In case of VR only 20% will be refunded at the time of retirement and 80% will be deposited in an insurance fund. No DCRG, commutation is admissible for NPS subscribers.

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    Member venkeesai is on a distinguished road
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    Default

    thanks it
    but I am asking that if he is tier -I or Tier-II
    the contribution amount by the employee (i,e (ex: Rs.25,000)
    the contribution amount by the employer (Rs. 25,000) by Govt
    can I calculate in this manner?
    is this eligible for my Friend

    actually he deposit Rs. 25,000 (12 months)
    In IT calculation can I add another Rs. 25,000 (by Govt contribution)
    U/s 80CCD?

  4. #4
    Senior Member svsankar is on a distinguished road
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    Default

    Quote Originally Posted by venkeesai View Post
    thanks it
    but I am asking that if he is tier -I or Tier-II
    the contribution amount by the employee (i,e (ex: Rs.25,000)
    the contribution amount by the employer (Rs. 25,000) by Govt
    can I calculate in this manner?
    is this eligible for my Friend

    actually he deposit Rs. 25,000 (12 months)
    In IT calculation can I add another Rs. 25,000 (by Govt contribution)
    U/s 80CCD?
    Dear Mr Sai,
    No he can take into account only his contribution subject to the condition that there is equal contribution by his employer. i.e, he can take only 25000 and not 50000. This is also subject to the overall limit of 1 lakh.
    sankar

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    Member venkeesai is on a distinguished road
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    Thanks again sankar,

    but what is the benefit to NPS subscribers?

    and why the column is given in the IT format? :- it is as follows
    U/s 80ccd New Pension Scheme Contribution by the employees upto a maximum of 10% of his salary contribution by the Govt. up to a mazimum of 10% Employees salary.

    at the same time Deductions U/s 80C includes GPF, UTGEGIS,PLI, LIC, etc., If an NPS subscriber can entry the GPF (i.e) NPS amount or no need?

    I can't understand it

    pls clarify

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    Senior Member svsankar is on a distinguished road
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    Dear Sai,
    Under 80 CCD only deductions in respect of contributions to Pension Scheme of Central Government. Deduction means deduction from your salary as per instructions available in ITR 1 & 2 return forms. NPS Tier I is not like GPF because it is non withdrawable accumulation. NPS Tier II will be similar to GPF. NPS appointees are not eligible to subscribe to GPF. You can go in for PPF in Banks or Post Offices. NPS contribution should be entered under 80 CCD area only and not in 80 C.

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    Member venkeesai is on a distinguished road
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    Smile

    hai sankar
    thanks for u r valuable comments
    but it should be clearly defined by the officials concerned to the New Recruits. If not like this confusions raises. now it is very clear that new recruits choose their option TIER-II for their contribution as well as the savings slab. is it right?

    Thanks
    Venkeesai

  8. #8
    Senior Member svsankar is on a distinguished road
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    one additional information which I would like to provide you is that Government Tier I contribution is exempted subject to a maximum limit of 10% of salary provided it is taken as Income in total income. i.e., if your total income from salary is 3,00,000 and you have contributed 25000 towards NPS and Government has contributed 25000 then your total income will be increased to 325000 and reduced in 80 CCD by 25000. Ultimately there will be no effect.
    As regards Tier I and Tier II. Tier I is compulsory and every New Pension Subscriber should contribute 10% of salary compulsorily. As this will be the source for their pension after retirement. As regards Tier II it has not yet been started by Government. They are yet to finalise on creating this fund.
    regards
    sankar.

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    Member venkeesai is on a distinguished road
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    thank u verymuch for u r immediate replay. now I am clear.

    and another clarification I need is,

    i think last 3 to 4 days before Income tax circular 13th amendment launched.
    in that circular no TA and NO HRA for central govt. staffs. all the amount received by him is under taxable. is it true?

    because last year we got excemption Rs. 800 per month (i.e Rs. 9600 p/a) and also actual HRA received is excempted by giving Rent receipt. is all these benefits still alive or not? please clarify because we gave our IT statements with the above calculations. if it is altered we should make calculation regarding new one. and another think is in our state we only got 30% arrear the remaining 30% will be given in Feb (Assumption) so i need correct and authonticate suggestions please

    thanks in advance
    Venkeesai

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    Senior Member tvenkatam is on a distinguished road
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    Dear friend,

    The 13th amendment to IT Rules dated December 18, 2009 relates to provisions now made in lieu of the erstwhile Fringe benefit tax concerning salaried class of employees. The transport allowance and HRA received by Government employees will not be covered under this and will continue to be exempt subject to limits.

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    Member venkeesai is on a distinguished road
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    sir pls clarify who is salaried class employee as u r answer?
    and also what is frindge benefit tax?
    Is it relates to normal central/State Govt. employees?
    in addition next year onwards GPF subscription and withdrawals also comes under taxable income?

    Don't mean wrong about my continues questions? If u help me I will guide my friends also

    Thanks sir

    regards
    venkeesai

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    Senior Member tvenkatam is on a distinguished road
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    Quote Originally Posted by venkeesai View Post
    sir pls clarify who is salaried class employee as u r answer?
    and also what is frindge benefit tax?
    Is it relates to normal central/State Govt. employees?
    in addition next year onwards GPF subscription and withdrawals also comes under taxable income?

    Don't mean wrong about my continues questions? If u help me I will guide my friends also

    Thanks sir

    regards
    venkeesai
    Dear Friend,

    1. Salaried class of employees are those employees in receipt of regular monthly income and include State/Central Government Servants.
    2. Some of the salaried employees (mostly in the private sector) are in receipt of benefits such as rent free accommodation, conveyance, refreshment, etc., in addition to monthly salary. Such perquisites are termed as 'fringe benefit' and were subject to payment of income tax (Fringe Benefit Tax) until last financial year. The Fringe Benefit Tax has been abolished from the year 2009-10.
    3. 13th amendment dated December 18, 2009 effective from April 01, 2009 reintroduced taxation of ‘Fringe Benefits’ by including the value of perks such as accommodation, conveyance and other benefits (paid by the employer) into the personal income of the employee for computation of income tax.
    4. HRA and Transport allowance received by Government employees are already taxable subject to limited exemption.
    5. From next financial year onwards (not likely, may be from April 2011 only) it is proposed to replace the Income Tax Act with the new Direct Tax Code 2009 in which it is proposed to do away with all kinds of exemptions such as HRA, interest on HBA, Transport allowance, LTA, retirement gratuity, etc. To compensate for the loss, the tax rates will be liberalized. For instance in the case of individuals the tax rate is proposed at 10% for income from 1.60 lakhs to 10 lakhs; 20% for income from 10 lakhs to 25 lakhs and 30% for income of above 25 lakhs. In addition the tax deduction limit on savings will be hiked from the existing one lakh to three lakhs. There will, however, be no exemption on perks and allowances of any kind.

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    Member venkeesai is on a distinguished road
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    Something that has always puzzled me all my life is why, when I am in special need of help, the good deed is usually done by somebody on whom I have no claim. ~ William Feather

    Thank U sir
    i am dedicating this quote for U specially

    we will meet soon on another forums

    regards
    Venkeesai

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    Senior Member R K Rao is on a distinguished road
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    Quote Originally Posted by venkeesai View Post


    Something that has always puzzled me all my life is why, when I am in special need of help, the good deed is usually done by somebody on whom I have no claim. ~ William Feather

    Thank U sir
    i am dedicating this quote for U specially

    we will meet soon on another forums

    regards
    Venkeesai

    Till recently (before I came to know and joined the GConnect) I was less confident on various official matters. Today it is not so.

    This is mainly due to the guidance and advise being rendered by the members of the GConnect. Today if I am unclear about an order or its interpretation, I know where to look.

    Thanks to the GConnect forum. I join Mr. Venkeesai in what he said with a quote.

    Rgds & Thanks to all those on the GConnect.

    RKR

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