As the income tax return (ITR) filing season for AY 2026-27 draws to a close for most salaried taxpayers, with the due date of 31 July fast approaching, one issue that continues to generate confusion is the tax treatment of an employer's contribution to the National Pension System (NPS) and the deduction available on such contribution under Section 80CCD(2) of the Income-Tax Act, 1961.
The issue has practical implications for taxpayers filing returns under both the old and the new tax regimes, since deduction under Section 80CCD(2) is available under both regimes, subject to the prescribed conditions and limits.
