NPS Calculator: How to grab additional income tax (ITR) exemption under National Pension System? EXPLAINED

NPS Calculator: National Pension System or NPS Scheme is a market-linked pension scheme, which is quite popular with employees. NPS Scheme is considered one of the most suitable investment to create retirement fund as it helps investors to get more money than the government-backed small savings debt schemes. However, importantly, NPS account holder can get an additional Rs 50,000 income tax benefit, which is beyond Rs 1.5 lakh income tax exemption under Section 80C of the Income Tax Act. This ITR exemption feature is very important for employees who have exhausted the Section 8C limit. 

Speaking on the NPS Scheme, Likhita Chepa, Lead Research, Capitalvia Global Research Limited said, "NPS account holders get an additional Rs 50,000 income tax exemption under the Section 80CCD(1B), which is beyond Rs 1.5 lakh income tax exemption under Section 80C of the Income Tax Act. This additional Rs 50,000 income tax exemption benefit is available to the investors under the NPS Tier-1 Account."

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Chepa went on to add that under the Section 80CCD(1) of the Income Tax Act, one gets income tax exemption on 10 per cent of one's net income in a financial year. However, Chepa maintained that net benefit won't go beyond Rs 1.5 lakh. Hence, this Section 80CCD(1B) is useful for those investing in NPS.

Chepa said that one can open NPS account online by logging in at the NSDL website or downloading the NSDL e-GOV app in one's mobile.