Retirement · component
Employer NPS contribution
Employer NPS is deductible under 80CCD(2) in both regimes, within a percentage-of-salary limit.
How the taxable value is determined
Deductible up to 14% of salary for the new regime and 10% for the old (higher for central government employees), and counted in the ₹7.5 lakh aggregate ceiling on employer retirement contributions.
Regime availability
- Old regime
- Available
- New regime
- Available
Documentation to keep
Form 16 Part B and NPS transaction statement.
Legal basis: Section 80CCD(2), Income-tax Act
Frequently asked questions
Is employer nps contribution taxable in India?
Employer NPS is deductible under 80CCD(2) in both regimes, within a percentage-of-salary limit. Deductible up to 14% of salary for the new regime and 10% for the old (higher for central government employees), and counted in the ₹7.5 lakh aggregate ceiling on employer retirement contributions.
Does the exemption apply under the new tax regime?
Under the old regime this treatment is available; under the new regime it is available. Legal basis: Section 80CCD(2), Income-tax Act.
What records should I keep for employer nps contribution?
Form 16 Part B and NPS transaction statement.
Related tools & guides
Reflects provisions in force for FY 2026-27; verify against the latest government publications (incometax.gov.in). Information, not tax advice.