FOOD CORPORATION OF INDIA
HEADQUARTERS
16-20, BARAKHAMBA LANE
NEW DELHI – 110001
No. DCPS / 1 / Wage Revision / 2017-2018
Dated: 13th Feb, 2023
Circular No. FCIDCPS-02/2023
Implications of the prevalent provisions of Income Tax Act’1961 on the transactions affected under National Pension System (NPS) are stated hereunder: –
|
Sl. No. |
Issue | Clarification |
| 1. | Eligible deduction on the contribution made by a Member Employee. | Contribution by a Member Employee whether mandatory (being 2% of Salary) or voluntary, however, restricted to Rs. 50,000/- is an allowable deduction under Section 80CCD (1B). |
| 2. | Tax implications on Employer Contribution to NPS. | Employer Contribution to NPS shall be included in working out the ‘Value of Perquisite’ as per Rule-3. |
| 3. | Applicable provisions on partial withdrawal from NPS. | Lump Sum withdrawal for specified reasons, limited to 25% of the total contribution by Member Employee, is exempt under Section 10 (12B) of Income Tax Act’1961. |
| 4. | Applicable provisions on ‘Premature Exit’ from NPS. | Permissible withdrawal upto 20% of the Corpus of the Member Employee is taxable and is to be included as part of Salary and tax deductions may be applied thereupon. The remaining 80% corpus of the Member Employee shall have to be mandatorily converted in Annuity, which is taxable as per Tax-Slab in the year of payout. |
This issues with the approval of the Executive Director (DCPS).
(Hemant Kumar Varshney)
AGM (DCPS)
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