Sections 80C, 80CCC, and 80CCD(1)
The combined limit for deduction under Sections 80C, 80CCC, and 80CCD(1) cannot exceed Rs 1.5 lakh.
Section 80CCD(1B)
Additional deduction of Rs 50,000 under Section 80CCD(1B) is available when you invest in a Tier 1 account. This deduction is over and above the combined limit of Rs 1.5 lakh (Under Section 80C, 80CCC, & 80CCD(1))
Section 80CCD(2)
If your employer is also contributing to your NPS account, then you can claim upto 10% of your salary (Basic + Dearness Allowance) income for tax deduction.. Please note this contribution goes from your salary only and helps in saving taxes based on your income tax slabs. Most of the companies these days have started providing this option. If you like NPS as a retirement product then check with your company’s finance team/HR to help you get started.
It is a voluntary benefit and the employee is free to opt out if he thinks it doesn’t suit him. The NPS benefit can reduce the tax liability of the individual significantly, especially in the higher tax brackets. If your basic salary is Rs.1 lakh, and the company puts Rs.10,000 in the NPS on your behalf, your annual tax will reduce by almost Rs.37,500.
Please note that this tax benefit can be availed of even under the new tax regime.