Earlier the tax deductions allowed for the NPS investments was only limited to Rs. 1 lakh. However, the same was amended in the budget of 2015 to encourage more people to invest in pension schemes. Amendments in the sections pertaining to NPS were announced in Budget 2015 by Finance Minister, Arun Jaitely. The limit of 1 lakh under Section 80CCD (1) was then increased to Rs. 1.5 Lakh (as per sub section 1A of Section 80CCD). Moreover, a new sub section 1B has been introduced under Section 80CCD with an aim to provide additional deduction of Rs. 50,000 for the contributions made by all individual assessee towards the new pension scheme. And the additional Rs.50,000 deduction limit is over and above the deduction limit allowed under Section 80C of the Income Tax Act, 1961.
