Does NPS work in the new regime?

The employer contribution under 80CCD(2) is generally allowed in both regimes within limits. The self contribution under 80CCD(1B) is an old-regime benefit. Confirm current limits before claiming.

NPS deductions: 80CCD(1B) vs employer 80CCD(2)

The extra ₹50,000 NPS deduction under 80CCD(1B) and the employer NPS deduction under 80CCD(2) — what differs, and which survives in the new regime.

6 min read · 2026-06-12

Three NPS buckets, three rules

80CCD(1) — your own NPS within the ₹1.5 lakh 80C pool (old regime)
80CCD(1B) — an extra ₹50,000 for self NPS, over and above 80C (old regime)
[80CCD(2)](/glossary/section-80ccd-2) — your employer's NPS contribution, deductible in both regimes within limits

Why this matters in the new regime

Most Chapter VI-A deductions vanish in the new regime — but employer NPS under 80CCD(2) usually survives. If your employer offers NPS, this is one of the few deductions that still helps new-regime filers.

What you should do

Check your salary structure for an employer NPS component — that is 80CCD(2)
Add personal NPS to 80C first; use 80CCD(1B) for the extra ₹50,000 (old regime)
Keep NPS transaction statements as proof
Run old vs new regime — 80CCD(2) can tilt new regime further in your favour
Draft figures in LastMinute ITR and verify

Common mistake

Double-counting NPS. The same contribution cannot sit in both 80C and 80CCD(1B). Use 80CCD(1B) only for amounts beyond the ₹1.5 lakh 80C cap.

Related guides

Compare regimes with LastMinute — then file on incometax.gov.in.