Is Employer Contribution to NPS 80CCD(2) exempted under the new tax regime by default?

Created by Product Content Team, Modified on Thu, 9 May at 10:32 AM by Product Content Team


An employer's contribution to the National Pension Scheme (NPS) is deductible under Section 80CCD(2) when calculating an employee's total income. The deduction is capped at 14% of the salary for central government employees and 10% for all other employees.


Employer contributions to NPS automatically receive exemption in the new tax regime, meaning that exemptions apply under both the old and new regimes.


If included as part of the Flexible Benefits Plan (FBP) or deducted in payroll, you must configure appropriate settings to exempt it in both tax regimes.


Click here to subscribe to our help videos

Related Links:

Video - To watch the Income Tax video, click here.

FAQs - To read more FAQs about Income Tax, click here.

Documentation - To read more about Income Tax, click here.

Product Update - To read about the product update, click here.


Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article