Tax Saving with NPS..
 

Save your Income Tax with National Pension System (NPS)

Income Tax, they say is a necessary evil that one always tries to avoid, but can not. And when it's finally time to pay income taxes, you end up investing mindlessly. Is not that the last thing you want?

With National Pension System (NPS) managed by HDFC Pension, you can save on tax today and secure your pension tomorrow.

• What does National Pension System offer you?
• It reduces your tax liability by availing the deductions u/s (80CCD) which will be upto Rs.1.5 lac- under section 80 CDD(1) and an additional Rs. 50,000 under section 80CCD (1B) per assessment year (applicable from FY 2015-16 / AY 2016-17).
• Dual benefit of saving on income tax and build a robust monthly retirement income.
• Flexible investment options during accumulation stage
• A user friendly online portal to provide you easy access to your pension account
• 
  

A salary illustration showing tax benefits of NPS investment..

Particulars	Without NPS	With NPS
Gross salary	2,500,000	2,500,000
Basic Salary (40% of Gross salary)	1,000,000	1,000,000
NPS contribution (10% of Gross salary) - 80CCD(1)	-	100,000
Additional contribution u/s 80CCD (1B)	-	50,000
Less: Total Deductions u/s 80CCD (1)and 80CCD (1B)	-	150
Less: NPS Deduction u/s 80CCE	-	100,000
Total Taxable Income	2,500,000	2,350,000
Total Tax at applicable income tax	592,250	545,900
Additional Tax Saving due to NPS	-	46,350*

* The above example is for illustrative purpose only. Kindly contact your tax consultant for exact calculation of your tax liabilities. The above mentioned tax benefits are subject to changes in the tax laws.

Calculate your returns on NPS investments -http://www.hdfcpension.com/nps-calculator.html

Tax Implication of NPS...

• Employer contributing to the NPS on behalf of an employee will get deduction from his income (i.e. employer's income) an amount equivalent to the amount contributed or / 10% of BASIC SALARY + DA of the employee, whichever is less. (Section 36 (1) (iv a) of the Income Tax Act 1961).
• Employer's contribution to NPS on behalf of the employee is treated as perquisite in the hands of the employees, but is deductible u/s 80CCD (2) of the Income tax Act, 1961 to the extent of 10% of basic salary. This deduction is over and above the limit of Rs.1.5 lac u/s 80 CCD (1). This will lessen the tax burden of the employee to the extent of amount deductible u/s80CCD (2) of the Income tax Act, 1961.
• Contribution by individual employee is eligible for a deduction from Income under Section 80CCD (1) of the Income Tax Act 1961 upto Rs 1.5 Lac. However, investments under Section 80C Section 80CCC and 80CCD(1) should not exceed Rs.1.5 lac per assessment year to claim for the deduction.
• An additional exclusive tax benefit of Rs.50,000under section 80CCD (1B) per assessment year (applicable from FY 2015-16/AY 2016-17) for NPS investments.

Note: 

All investments are subject to market risks and there is no assurance or guarantee that the investment objectives shall be achieved. Tax laws may change, affecting the Return On Investment (ROI). HDFC Pension Management Company Limited. PFRDA Reg No: PFRDA/007/2013/PFM

Src: http://www.hdfcpension.com/national-pension-scheme/tax-saving/

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