The Statutory Brief

IT Act 1961 → 2025 / Section 80CCD

Deductions

Section 80CCD → Section 124

Deduction for NPS contributions: employer (80CCD(2)) and additional ₹50,000 (80CCD(1B))

Section 80CCD of the old Income-tax Act, 1961 · new section 124 under the Income-tax Act, 2025

New reference Section 124

Income-tax Act, 1961Section 80CCD

  • 80CCD(2): employer contribution up to 10% of salary (14% for Government, and for all employees under the new regime)
  • 80CCD(1B): additional ₹50,000 for own NPS contributions
  • NPS Vatsalya contributions for minors within the ₹50,000
  • 80CCD(1) employee contribution within the ₹1.5 lakh 80CCE limit

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 124

  • 124(1)–(2): employer contribution up to 10% (14% for Government employers, and 14% under the new regime)
  • 124(3): additional ₹50,000 for own contributions
  • 124(4): contributions for a minor counted within the ₹50,000
  • No double deduction with section 123 (124(5))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; limits unchanged. Employee contribution within the ₹1.5 lakh limit is covered by section 123 / Schedule XV.

Practice notes

  • Only the employer contribution (124(1)) is available under the new regime.
  • Amounts received on closure/opt-out are taxable in the year of receipt (124(6)), except receipts by a nominee on death.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is 80CCD(1B) called in the new Income Tax Act 2025?

Section 124(3): an additional deduction of up to ₹50,000 for NPS contributions.

Is employer NPS contribution allowed under the new regime?

Yes. Section 124(2) allows employer contribution up to 14% of salary under the new regime.

What is section 80CCD called in the new Income-tax Act, 2025?

Section 80CCD of the Income-tax Act, 1961 corresponds to Section 124 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 80CCD under the new Income Tax Act?

Renumbered; limits unchanged. Employee contribution within the ₹1.5 lakh limit is covered by section 123 / Schedule XV.

Is section 80CCD still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 80CCD of the 1961 Act. Section 124 of the 2025 Act applies from tax year 2026-27.

Related sections

80C→123Deduction for life insurance, PF, PPF, ELSS, tuition fees, home-loan principal and other specified savings115BAC→202New tax regime (default) for individuals, HUFs, AOPs, BOIs and artificial juridical persons192→392TDS on salary (and on withdrawal of accumulated PF balance)