BACK Arrears to NPS by employer

Dear Client,
As per section 17 of the Income Tax Act, taxable salary include pension. Thus, any payment including arrears made by your employer to your NPS account is a part of your taxable salary under section 17(1) of the Act. However, there is a threshold limit of Rs 7,50,000 on the overall contribution done by the employer towards NPS, PF and superannuation funds combined. Any excess amount will be taxable. Section 80CCD(2) of the I T Act allows salaried individuals to claim the following deduction against employer's contribution towards NPS under 1) Old Tax Regime: A maximum deduction of 10% of their salary (basic + DA) contributed by any other employer towards NPS and 2) under New tax Regime: A maximum deduction of 14% of their salary (basic + DA) contributed by any other employer towards NPS. The maximum limit on employer contribution to PF, NPS and Superannuation funds is limited to Rs 7,50,000. Thus any contribution by the employer over and above the limit, will be considered as perquisite and taxable under section 17(2) of Income-tax Act. Further, in a situation where your total income includes any past arrears/dues paid in the current year, an employee can clim relief under Section 89(1) of the Income Tax Act. The income tax department has made it mandatory to file Form 10E if you want to claim relief under Section 89(1) of the Act. Income Tax is a branch of law or legislation that eventually comes under the arena of Chartered Accountants and Tax Consultants, who have expertise and in-depth knowledge on the subject and may guide you properly to navigate the issue effectively. Hence, it is suggested to consult with the said professionals for more clarification/information and to understand your rights and remedies in the given situation.

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Dear Sir,
You cannot claim this retrospectively as exempt in old years.

If contribution exceeds ₹7.5 lakh in FY 2021-22 onwards, the excess portion is taxable in the current year.

You may contact local charted accountant and get professional advice.