With effect from FY:2015-16, for investment in NPS, taxpayers can avail additional exemption of up to Rs. 50,000 as per Section 80CCD(1B) while computing the taxable income. This deduction is over and above the deduction up to Rs. 1,50,000 allowed for the sum total of deductions u/s 80C, 80CCC & 80CCD(1) and as placed in 80CCE.
Since it is not part of 80CCE, the question is where should the deduction under section 80CCD(1B) appear in Form 16?
The deduction under Section 80CCD(1B) has independent eligibility. It should appear in ‘Other Deductions under Chapter VI A’. For reference, go through the couple of examples below:
|Employee Contribution to NPS||Rs. 70,000||Rs. 40,000|
|Gross Amount||Rs. 70,000||Rs. 40,000|
|Qualifying Amount||Rs. 70,000||Rs. 40,000|
|Deduction Amount||Rs. 50,000||Rs. 40,000|