Employer NPS: government staff
Employer NPS saves ₹19,660 in the new regime
TaxSavvy for ₹12.75 L to ₹25 L, government or PSU job
Government salary, NPS, DA arrears. Tax worked out the way your pay slip reads.
Central, state or PSU employee
What people like you ask us
Done for you, at a fixed price
- Complete salaried tax plan
- Gratuity calculation and payment (Code on Social Security, earlier Payment of Gratuity Act)
- Income tax return for salaried and pensioners, ITR-1 (Sahaj)
Send any one of these to start
- Salary slip
- Form 16
The jobs people like you bring us
Salaried? Your ITR, filed by a CA on WhatsApp.
Send Form 16 and AIS; we pick the regime, file and e-verify.
1 working day after documentsIf you wait: Late fee ₹5,000, or ₹1,000 if income is up to ₹5 lakh (Sec 428, old 234F)
Free first stepSee your tax in 30 secondsPaying too much tax? Keep more of your salary.
A CA plans your year: regime, deductions, HR declarations, ITR included.
48 hoursFree first stepTake the free Money CheckOld or new regime? Know in 30 seconds.
We compare both on your real numbers and tell HR the winner.
Fixed price, shown before you pay48 hoursFree first stepCompare both regimes free
Questions, answered the CA way
Facts, Provisions and law, Analysis, Conclusion.
Section 124 (old 80CCD(2)): Employer NPS Contribution (Both Regimes)
- Facts
- The only deduction available in BOTH old and new tax regime. Employer contributes to your NPS on your behalf. You pay zero, and get a ₹45,000 to ₹1.05L annual deduction. The most underused tax saving move for salaried professionals.
- Provisions and law
- Sec 124 (old 80CCD(2)); Finance Act 2024; Sec 202 (old 115BAC); Sec 80CCD(1B); PFRDA Regulations
- Analysis
- How Sec 124, Income-tax Act 2025 (old Sec 80CCD(2)) works in practice: Your basic salary is ₹50,000/month. Employer contributes 14% of ₹50K = ₹7,000/month to your NPS. That ₹7,000 is NOT counted as your income. Annual NPS contribution by employer = ₹84,000. Deduction under Sec 124 (old Sec 80CCD(2)) = ₹84,000. Your in-hand salary is unchanged. But your taxable income falls by ₹84,000. Two-step benefit: Step 1, Lower taxable income now (immediate tax saving). Step 2, NPS corpus grows tax-free. At retirement: 60% lump sum withdrawal tax-free. 40% in annuity (taxable as salary in retirement, but typically at lower rate). New regime taxpayers especially benefit: In new regime, Sec 123, 126 (old Sec 80C, 80D), home loan interest are all gone. But Sec 124 (old Sec 80CCD(2)) REMAINS. For a new regime taxpayer at 30% bracket with basic salary ₹50K/month: ₹84,000 × 30% = ₹25,200 saved annually. Zero investment required from them.
- Conclusion
- Check if NPS account (PRAN) exists, if not, open via eNPS portal (enps.nsdl.com)
- Inform employer HR to activate NPS employer contribution (Form KYC to employer)
- Request CTC restructuring, move portion of special allowance to NPS employer contribution
- Confirm the contribution percentage: private sector max 14% of (basic + DA)
NPS Tier 1: 80CCD(1B) ₹50K Extra + Sec 124 (old 80CCD(2)) Employer
- Facts
- NPS gives you TWO deductions unavailable from any other source: ₹50K extra over the Sec 123, Income-tax Act 2025 (old Sec 80C) limit via 80CCD(1B), and employer contribution deduction via Sec 124 (old Sec 80CCD(2)), available in BOTH old and new regime. Together they save ₹15,600 to ₹44,100 in annual tax with zero personal investment cost for the employer portion.
- Provisions and law
- Sec 124 (old 80CCD(1)); Sec 80CCD(1B); Sec 124 (old 80CCD(2)); Sec 202 (old 115BAC(2)); PFRDA Regulations
- Analysis
- The two NPS deductions, completely different: 80CCD(1B) = YOUR OWN contribution to NPS, extra ₹50K beyond 80C, old regime only. Sec 124 (old Sec 80CCD(2)) = EMPLOYER contribution to your NPS account, deducted from your taxable salary, both regimes. Most people confuse the two. You can have both if you are salaried. Sec 124 (old Sec 80CCD(2)), how to activate it: Step 1: Open NPS Tier 1 account (eNPS portal or employer HR). Step 2: Get PRAN number. Step 3: Email HR: "Please activate NPS employer contribution at 14% of my basic salary under Section 80CCD(2) and restructure my CTC accordingly." Step 4: HR restructures payslip, NPS employer line appears. Step 5: Form 130 (old Form 16) Part B shows Sec 124 (old Sec 80CCD(2)) deduction. Net effect: same CTC total, but ₹X thousand now goes to NPS instead of special allowance (which was fully taxable). Real numbers, basic salary ₹80,000/month: 14% NPS employer = ₹11,200/month = ₹1,34,400/year.
- Conclusion
- Check if you have NPS Tier 1 account, if not, open at eNPS portal (enps.nsdl.com)
- For 80CCD(1B): contribute ₹50,000 to NPS Tier 1 by March 31 each year
- For Sec 124 (old Sec 80CCD(2)): request employer HR to activate and restructure CTC (one-time email)
- Verify payslip: NPS employer contribution line should appear
Old vs New Tax Regime: Which Is Better For You?
- Facts
- The most important annual tax decision for every salaried employee. New regime: lower rates, no deductions. Old regime: higher rates, many deductions. The winner depends entirely on HOW MUCH you invest and claim. Rule of thumb: if deductions > ₹3,75,000 per year → old regime is better. Below that → new regime wins. Calculate, don't guess.
- Provisions and law
- Sec 202 (old 115BAC); Finance Act 2023; Finance Act 2024; Old Regime Slabs; Salaried switching
- Analysis
- Break-even deduction analysis, the key table: Income ₹10L. Old regime: taxable = ₹10L − ₹75K std − ₹1.5L Sec 123, Income-tax Act 2025 (old Sec 80C) − ₹25K Sec 126 (old Sec 80D) − ₹2L Sec 22(1)(b) (old Sec 24(b)) = ₹5.5L. Tax = 20% × (₹5.5L − ₹5L) + 12,500 = ₹22,500. New regime: taxable = ₹10L − ₹75K std = ₹9.25L. Tax = 5% × ₹4L (₹3-7L) + 10% × ₹2.25L (₹7-9.25L) = ₹20,000 + ₹22,500 = ₹42,500. OLD REGIME WINS if you have home loan + Sec 123 (old Sec 80C) investments. When new regime wins clearly: (1) No home loan. (2) No Sec 123 (old Sec 80C) investments beyond EPF (which is forced, not a choice). (3) No HRA (own accommodation). (4) Young employee, just started working, no investments yet. (5) Income below ₹7L, new regime Sec 156 (old Sec 87A) rebate makes tax zero. (6) Very high income (₹30L+) where deductions (capped at ₹3.75L) have limited impact on marginal tax.
- Conclusion
- List all deductions you actually use: Sec 123 (old Sec 80C; EPF + investments), Sec 126 (old Sec 80D; health insurance), Sec 22(1)(b) (old Sec 24(b); home loan interest), HRA
- Add standard deduction ₹75K to both regime computations
- Compute actual old regime tax: salary − ₹75K std − Sec 123 (old Sec 80C) − Sec 126 (old Sec 80D) − HRA − Sec 22(1)(b) (old Sec 24(b))
- Compute new regime tax: salary − ₹75K std − Sec 124 (old Sec 80CCD(2); if activated) → apply new slabs
80-IAC (now 140), 3-year tax holiday: the step most startups miss
- Facts
- Sec 140, Income-tax Act 2025 (old Sec 80-IAC) gives DPIIT-recognised startups a 100% profit deduction for any 3 consecutive years within the first 10 years of incorporation. Applicable to Pvt Ltd and LLP only. Not available to OPC or sole proprietors.
- Provisions and law
- IT Act 1961, Sec 80-IAC (now 140) | Finance Act 2024 extended to 2030
- Analysis
- The critical step most miss: DPIIT recognition is necessary but not sufficient. You must separately apply to the Inter-Ministerial Board (IMB) on the Startup India portal for certification. Without IMB certificate, Sec 140 (old Sec 80-IAC) deduction cannot be claimed even with DPIIT recognition. Strategy: Apply for IMB in Year 2-3. Claim Sec 140 (old Sec 80-IAC) for Years 3, 4, 5 when you're most profitable. Don't waste it on loss-making years.
Government salary, NPS, DA arrears. Tax worked out the way your pay slip reads.
Start free. Pay a fixed price only when a CA does the work.
Get it done on WhatsApp