RBE No. 31/2016: National Pension System – NPS – Tax Benefit Available
No.2012/F(E)III/1(1)/4, dated 07.04.2016
Sub: Tax benefit available under National Pension System (NPS).
A copy of Pension Fund Regulatory & Development Authority (PFRDA)’s letter No.PFRDA/23/CORP/20/5, dated 25.02.2016 on the above subject is enclosed for information and compliance. The contents of the letter regarding opening of e-NPS account shall apply mutatis mutandis on the Railways also.
Pension Fund Regulatory and Development Authority
No.PFRDA/23/CORP/20/5, dated 25th February, 2016
Sub: Tax benefit available under National Pension System (NPS).
1. You would be aware that under the National Pension System (NPS), the subscribers can avail of tax benefit under Sec. 80CC(D), up to 10% of their salary (basic + DA) which is capped at Rs.1.50 lakhs, under section 80CCE. From FY 2015-16, an additional tax deduction over and above the Rs.1.5 Lakhs, is available only to subscribers of NPS if they invest upto Rs.50000 in NPS under Sec. 80CCD(IB) of the Income Tax Act. Any citizen of India including persons covered under old defined benefit Pension Scheme can open NPS account on voluntary basis and avail of the tax benefits u/s 80CCD(IB) by contributing additionally Rs.50000 to NPS.
2. This additional tax benefit on investment upto Rs.50000 provides an opportunity not only to those employees who are mandatory covered under NPS, but also to all other employees, who may be covered under old pension scheme/ provident fund/ superannuation fund, as well as to any other Indian citizen between 18 to 60 years of age to avail of this tax benefit by opening an NPS account on voluntary basis and by investing the required amount.
3. PFRDA has provided an easy and convenient way to subscribe to NPS by recently introducing eNPS, which any individual can make use of to join NPS. A new subscriber can adopt the following eNPS methods for joining NPS:
(a) Using Aadhaar card issued by UIDAI which is authenticated through OTP received from UIDAI on the registered mobile of the applicant. In this case, the subscriber can instantly get himself/ herself registered. He/she has to simply visit the eNPS module in NPS Trust website at www.npstorg.in
(b) Using PAN and net banking of the selected Bank chosen by the subscriber. In this case KYC verification is done by the Bank. The NPS account gets activated only after KYC verification by Bank. He/ she has to go to eNPS module in NPS trust website at www.npstrustorg.in
4. A new subscriber can also open an account physically through any of the Points-of-Presence-Service Provider (POP-SP). The list is available on www.pfrda.org.in
5. Therefore, your employees who are not NPS members can open their NPS account, and make contribution using any of the three options mentioned above. Existing NPS subscribers can also make additional contributions to avail of the tax benefits by using any of the options as stated above.
6. Contribution up to Rs.50000 in NPS for additional tax benefits in the current year has to be made by 31.03.2016 and it is important that this message be conveyed to all your staff members and employees right up to the level of DDOs/ DTOs, at the earliest. This will definitely help in their tax planning.
7. We request you to disseminate the above information to all concerned.
Download Railway Board Circular RBE No. 31/2016
Forward reference ⇒ RBE No.