Section 80CCD(2) Calculator
Find the deduction on your employer's NPS contribution — over and above 80C and 80CCD(1B), and available even in the new tax regime.
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80CCD(2) deduction breakdown
Get your CTC restructured to maximise 80CCD(2)
We help you add employer NPS to your package and claim every rupee of deduction.
Disclaimer: Indicative estimate for salaried individuals. Actual deduction depends on your CTC structure and NPS contribution actually deposited by the employer. Limits per Finance (No.2) Act 2024.
Why Section 80CCD(2) is the best-kept tax break
80CCD(2) lets your employer contribute to your NPS and gives you a deduction for it — completely over and above the ₹1.5 lakh limit of Section 80C and the extra ₹50,000 of Section 80CCD(1B). Uniquely, it is one of the very few deductions still allowed in the new tax regime, and Budget 2024 raised the private-sector cap from 10% to 14% of Basic+DA there.
80CCD(2) deduction limits — FY 2026-27
The deduction equals the employer's actual NPS contribution, but is capped at a percentage of your Basic salary plus dearness allowance. The percentage depends on your employer type and, for private employees, the tax regime you pick.
| Employer type | Old regime | New regime |
|---|---|---|
| Central / State Government | 14% | 14% |
| Private / Corporate employer | 10% | 14% |
Worked example
Basic + DA of ₹6,00,000, employer contributes ₹60,000 to NPS, top 30% slab. Watch how the regime changes the eligible cap — and how the deduction is always the lower of the contribution and the cap.
Key terms explained
Over and above 80C
80CCD(2) is separate from the ₹1.5 lakh Section 80C limit and the extra ₹50,000 under 80CCD(1B). All three can be claimed together, so employer NPS is genuinely additional tax relief.
Available in the new regime
Most deductions vanish in the new regime, but 80CCD(2) survives. That makes it the single most powerful way for new-regime taxpayers to legally reduce taxable salary.
Must be part of CTC
The employer contribution has to be built into your CTC and actually deposited to your NPS Tier-I account. A voluntary top-up you pay yourself does not qualify under this section.
Excess is taxable
Any employer contribution above the cap (10% or 14% of Basic+DA) is not deductible — it is added back to your salary income and taxed at your slab rate.
Questions people ask
Short answers on Section 80CCD(2) Employer NPS. Tap a question to open it.
01What does section 80CCD(2) allow?
A deduction for the employer's contribution to your NPS Tier-I account — up to 14% of salary under the new regime and 10% under the old regime for a non-government employee. Central and state government employees are allowed 14% under both.
02Is this within the ₹1.5 lakh 80C limit?
No. The employer contribution under 80CCD(2) is over and above the ₹1,50,000 ceiling of section 80CCE and over and above the ₹50,000 under 80CCD(1B).
03Is it available under the new tax regime?
Yes — it is one of the very few deductions that survives under the new regime, which makes it the main structuring opportunity for salaried taxpayers who have opted for it.
04What counts as salary for the 14% limit?
Basic salary plus dearness allowance forming part of retirement benefits. Allowances and perquisites are excluded, so the deductible amount is usually much smaller than 14% of CTC.
05Is there an overall cap on employer retirement contributions?
Yes. Employer contributions to provident fund, superannuation and NPS taken together are taxable as a perquisite to the extent they exceed ₹7,50,000 in a year, along with the accretion on the excess.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.