I want to know the tax benefits

Tax Benefits under NPS:

1.     Tax benefits to employee on self-contribution:

Employees contributing to NPS are eligible for following tax benefits on their own contribution:  

a)      Tax deduction up to 10% of salary (Basic + DA) under section 80 CCD(1) within the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

b)     Tax deduction up to ₹50,000 under section 80 CCD(1B) over and above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

2.     Tax benefits to employee on Employer’s contribution :

Eligible for tax deduction up to 10% of salary (Basic + DA) (14% if such contribution is made by Central Government) contributed by employer under Section 80 CCD(2) over the limit of Rs. 1.50 lakh provided under section 80 CCE.

3.     Tax benefits to self-employed:

Individuals who are self-employed and contributing to NPS are eligible for following tax benefits on their own contribution: 

a)      Tax deduction up to 20 % of gross income under section 80 CCD (1) with in the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

b)      Tax deduction up to ₹50,000 under section 80 CCD(1B) over and above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

4.     Tax benefits on partial withdrawal from NPS account:

Eligible for tax exemption on the amount withdrawn upto 25% of the self contribution, on such terms and conditions as may be specified by PFRDA under section 10(12B).

5.     Tax benefit on purchase of Annuity :

Eligible for tax exemption on purchase of annuity upon attaining the age of 60 or superannuation under section 80CCD(5). However, the subsequent income received from annuity is subject to tax under section 80CCD(3).

6.     Tax benefit on lump sum withdrawal:

Eligible for tax exemption on lumpsum withdrawal of 60% of accumulated pension wealth upon attaining the age of 60 or superannuation under section 10(12A)

7.     Tax Benefits to Corporates/ Employers :

Eligible for tax deduction on the amount contributed as employer’s contribution towards the NPS account of employees, up to 10% of the salary (Basic + DA) of employer’s contribution as ‘Business Expense’ from the Profit & Loss Account under section 36(1)(iv)(a).

The tax provisions referred are from Income Tax Act, 1961