Corporate NPS under Section 80CCD(2)

Section 115BAC, the new regime, blocks most Chapter VI-A deductions. Two salary items still change the tax for most people: the standard deduction, and Section 80CCD(2), which is your employer's contribution to NPS. Family pension and the Agniveer corpus can also remain. They do not appear in a typical CTC.

Your own extra NPS of ₹50,000 under Section 80CCD(1B) is outside the ₹1,50,000 Section 80CCE cap. You can claim it only in the old regime. Section 115BAC does not allow 80CCD(1) or 80CCD(1B).

Three sections cover NPS. Who pays, and which regime you use, decides which section applies.

The threshold table says 80CCD(2) is not subject to the ₹1,50,000 ceiling under Section 80CCE. The extra ₹50,000 under 80CCD(1B) is also outside that ceiling, in the old regime. Do not claim the same deposit under both 80CCD(1) and 80CCD(1B). Section 115BAC keeps 80CCD(2) in the new regime and leaves out 80CCD(1) and 80CCD(1B).

For this percentage, salary means Basic + Dearness Allowance. It does not include HRA, special allowance, or variable pay.

The 14% (or 10%) cap is not the only test. Employer money paid into a recognised PF, NPS under Section 80CCD, and an approved superannuation fund is added together under Section 17(2)(vii).

A high CTC with a large employer EPF and 14% NPS can cross ₹7,50,000 even when the 14% deduction itself is within Section 80CCD(2). Add employer EPF, employer NPS, and superannuation before you treat the full 14% as tax-free.

Private-sector example. The numbers are chosen so the 14% new-regime cap is easy to see. Check your Form 16 and the payroll codes with HR before you ask for a change.

In the old regime you can also contribute your own ₹50,000 under 80CCD(1B) to Tier-I. That ₹50,000 is outside the ₹1.5 lakh 80C basket. It is not allowed in the new regime.

Edit the names and amounts, then send it to HR or compensation and benefits.

Subject: Request to enable Corporate NPS (employer contribution) in my CTC

Hi [HR Name],

I am writing to request enrollment in the company’s Corporate NPS arrangement (if available), with an employer contribution toward my Tier-I NPS PRAN.

Context (New Tax Regime):
- Employer NPS qualifies for deduction under Section 80CCD(2).
- For private-sector employees taxed under s.115BAC, the deductible employer contribution is up to 14% of Basic + DA.
- This sits outside the ₹1.5 lakh 80CCE limit.
- Please also confirm we will stay within the ₹7.5 lakh aggregate employer contribution cap across EPF + NPS + superannuation (s.17(2)(vii)).

My details:
- Employee ID: [ID]
- Current Basic + DA (annual): ₹[amount]
- Requested employer NPS: [__]% of Basic+DA (cap 14% New Regime) = ₹[amount]/year
- Preferred effective date: [payroll month]
- PRAN (if already allotted): [PRAN / “please initiate fresh”]

Please confirm:
1) Whether Corporate NPS is active with a registered POP / NPS Trust corporate model
2) Whether we can restructure taxable special allowance ↔ employer NPS within the same CTC
3) Payslip / Form 16 presentation of the employer NPS line
4) Any employee co-contribution requirement

Happy to join a short call with payroll.

Thanks,
[Your name]
[Phone]

1. Take your last three payslips and mark Basic, DA, employer EPF, and any superannuation.
2. Work out 14% of (Basic + DA). Then add employer EPF + employer NPS + superannuation and compare the total with ₹7,50,000.
3. Send the HR draft. Ask for the Corporate NPS policy and the POP name.
4. Compare regimes in the regime comparator and the income tax calculator.
5. Read the NPS section of the salaried employee guide.

Not tax advice. The figures follow the Income Tax Department pages linked above, and the NPS Trust benefits description already on this page. Confirm the payslip treatment with payroll before you change CTC.