Hi Gurus,
This is regarding the Tax calculation for getting additional Tax relief u/s 80CCD(1B).
We have found that system is not considering arrears SPF/NPS contributions pertaining to previous Financial Years u/s 80C (Rs1,50,000) in providing Tax exemption under NPS scheme u/s 80CCD(1B).
For example,LIC =1,00,000
Current FY PF/NPS contribution = 30,000
Previous FY PF/NPS contribution = 40,0000
NPS saving u/s 80CCD(1B) =50,000
For providing additional NPS exemption system does the following calculation as explained below:
a) (1,00,000 + 30,000) = 1,30,000 u/s 80C and takes 20,000 from NPS saving to make the total 1,50,000 u/s 80C.
b) Now system takes the remaining (50,000 - 20,000)=30,000 from NPS saving.
c) Thus system is providing only 30,000 exemption u/s 80CCD(1B).
But as we know on u/s 80CCD(1B) relief, system should consider arrears PF/NPS contribution of 40,000 and as such employee should get whole50,000 saving under NPS u/s 80CCD(1B).
Why SAP is not considering40,000 (here) in providing relief u/s 80CCD(1B).
Best Regards,
Sonu Gupta