Deductions and exemptions · Tax Year 2025-26
Section 80CCD(1B): extra NPS deduction of ₹50,000
Section 80CCD(1B) lets you deduct up to ₹50,000 for your own NPS contribution, over and above the ₹1,50,000 limit of section 80C. It applies in the old regime only. Learn who can claim it and what proof you need.
On this page
Section 80CCD(1B) allows an extra deduction of up to ₹50,000 for your own contribution to the National Pension System (NPS), over and above the ₹1,50,000 limit that covers sections 80C, 80CCC and 80CCD(1). It is available in the old regime only. In the new regime, only your employer's NPS contribution under 80CCD(2) is deductible.
The figures are signed off for the tax year 2025-26. Those for the tax year 2026-27 are provisional and carry forward the 2025-26 values. The Income-tax Act, 2025 renumbers sections; this guide uses the earlier section number, and the ₹50,000 limit for 2026-27 is TaxCare's provisional figure.
How the limits stack
Section | What it covers | Limit |
|---|---|---|
80C, 80CCC and 80CCD(1) together | PPF, ELSS, life insurance, pension fund, your own NPS under (1), and more | ₹1,50,000 |
80CCD(1B) | Your own NPS contribution, extra | ₹50,000 |
80CCD(2) | Employer's contribution to your NPS | 14% of salary for Central/State Government employers; 10% for others (old regime) |
So a person who has already used the full ₹1,50,000 can claim a further ₹50,000 through 80CCD(1B), for a total of ₹2,00,000 in these sections. The 80CCD(1) part of your NPS contribution itself is limited to 10% of salary if you are employed, or 20% of gross total income if you are self-employed or a pensioner.
Who can claim
An individual who contributes to NPS and is in the old regime. The deduction is also subject to the overall rule that the sum of deductions cannot exceed your gross total income.
How much tax it can save
The saving depends on your tax slab. In the old regime, the top slab is 30% on income above ₹10,00,000, and cess is 4%. As an illustration:
- A person in the 30% slab who contributes ₹50,000 reduces taxable income by ₹50,000.
- Tax saved is 30% of ₹50,000 = ₹15,000, plus 4% cess = ₹15,600.
- In the 20% slab, the saving is ₹10,000 plus cess = ₹10,400.
These figures ignore surcharge, which applies on total income above ₹50,00,000 and would raise the saving slightly.
80CCD(1B) vs 80CCD(2)
Point | 80CCD(1B) | 80CCD(2) |
|---|---|---|
Whose contribution | Yours | Your employer's |
Regimes | Old only | Old and new |
Limit | ₹50,000 | 14% (government) or 10% (others) of salary in the old regime; 14% for everyone in the new regime |
Over the 80C limit | Yes | Yes, a separate section |
If your employer offers an NPS contribution through salary restructuring, 80CCD(2) can help in both regimes. See new regime: what deductions are still allowed.
Proof you need
The return asks for your PRAN (Permanent Retirement Account Number) and the amount contributed. Keep the NPS statement. The department rejects a deduction claim whose details are missing.
Steps to claim
- Choose the old regime (compare first; see how to switch between old and new regime).
- Enter the NPS contribution made in the tax year.
- Check that it is within ₹50,000 for 80CCD(1B).
- Enter your PRAN.
- Keep the statement.
How TaxCare helps
TaxCare compares the old and new regime for you with your NPS contribution included, so you can see whether the extra ₹50,000 actually changes the better regime. It caps your claim at the limit and asks for the PRAN. See the full list in all income tax deductions in one place and use the income tax calculator.
This guide gives general information and is not professional tax advice.
Questions on this topic
Is 80CCD(1B) over and above 80C?
Yes. The ₹1,50,000 limit covers 80C, 80CCC and 80CCD(1) together. The ₹50,000 of 80CCD(1B) is separate.
Can I claim 80CCD(1B) in the new regime?
No. In TaxCare's rules, the only NPS deduction in the new regime is the employer's contribution under 80CCD(2).
What is the difference between 80CCD(1B) and 80CCD(2)?
80CCD(1B) is for your own contribution. 80CCD(2) is for your employer's contribution to your NPS.
What proof do I need?
Your NPS contribution statement with your PRAN.
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