INCOME FROM SALARY -14

Dr. ANU JOSSY JOY

Assistant professor in Commerce
Nirmala College, Muvattupuzha
 Contribution by the Employer to Notified
Pension Scheme

Where an Individual has been employed by

the Central Govt. on or after 01/01/2004, or
any other employer and the employer
has contributed to the account of the
employee under a pension scheme notified
by the central Govt.,
such contribution shall be deemed
to
be the income in the previous year
 Contribution to NPS (National pension
System) or Notified Pension Scheme
 Applicable for those who join service on or after
01/01/2004

 It is also applicable to those covered under contributory

pension scheme

 Every employee should contribute a certain % of his

salary p.m. to NPS

 Employer also makes an equal contribution

 Salary = Basic Salary + DA provided as per terms of

employment
 Taxability

 Employer’s Contribution is to be Included in Salary income of the

employee

 Employees contribution or 10% of the salary, whichever is less, is

eligible for deduction u/s 80CCD(1). An additional deduction of
Rs.50,000 is also available u/s 80CCD(1B). Deduction u/s 80CCD(1)
shall not exceed Rs. 150000 together with deductions u/s 80C and
80CCC

 Employers contribution or 14% of salary (for central Govt.

employees) / Employers contribution or 10% of salary (for other
employees) as the case may be, is eligible for deduction u/s
80CCD(2)

 Pension received from the fund is fully taxable in the hands of the
employee
 Relief Under Section 89 and Rule 21 A

 Is applicable to an assessee who receives the following

incomes and his income is taxed at a higher rate than that
at which it would have otherwise been taxed

 Advance salary
 Arrears of salary
 Gratuity as per section 10(10)
 Commutation of Pension as per section 10(10A)
 Encashment of earned Leave as per section 10(10AA)
 Retrenchment compensation as per section 10(10B)
 Profits in lieu of Salary as per section 17(3)
 Arrears of Family Pension
If any exemption has been already availed, not entitled to Relief
If any exemption has been already availed, not entitled to Relief
Thank You