Section 80CCD(1B) provides an extra tax deduction of up to ₹50,000 per year for contributions to the NPS (National Pension System). This is in addition to the ₹1.5 lakh limit under Section 80C.

How It Works

• Limit: Maximum ₹50,000 per financial year
• Eligibility: Any individual (salaried or self-employed) contributing to NPS
• Tax saved: Up to ₹15,600 at 30% slab, ₹10,000 at 20%, ₹2,500 at 5%

For FIRE Investors

NPS is already attractive for financial independence due to equity exposure and tax benefits. The 80CCD(1B) deduction makes it even more valuable for high earners—effectively reducing your tax while building your retirement corpus. Pair with PPF and ELSS for a balanced tax-efficient portfolio.