Section 80CCD(1B)

Section 80CCD(1B) — the law in short

What the courts have decided on section 80CCD(1B), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Manmohan Singh v ITO ITATHelps taxpayerValidity unconfirmed
  I filed my return under the new regime by default, then filed a revised return within time switching to the old regime and claiming my exemptions and Chapter VI-A deductions. The CPC has processed it under the new regime saying the regime cannot be changed in a revised return. Can it?
  On this order, yes, for a salaried assessee with no business or professional income. The Tribunal held that a revised return filed in time under s.139(5) supersedes the original, that the proviso to s.115BAC(6) restricting the number of times the option may be exercised does not apply where there is no business or professional income, and that the filing of Form 10-IEA is procedural — the delay in filing it was condoned and the fact of filing it satisfied the requirement. The Assessing Officer was directed to process the revised return under the old regime with the exemptions and deductions claimed.
• Statutory position — s.80CCD(1B) and s.80CCD(2): the fifty-thousand NPS deduction that does NOT survive s.115BAC(1A), the employer contribution that does, and the fourteen per cent proviso inserted by Act No. 15 of 2024 CBDT Circulars & InstructionsCuts both ways
  My client is in the default regime under s.115BAC. Can he still claim the extra fifty thousand for NPS, and what is the ceiling on his employer's NPS contribution now?
  No on the first, better news on the second. Section 115BAC(2)(i) computes the total income of a person taxed under s.115BAC(1A) without any deduction under Chapter VI-A other than sub-section (2) of section 80CCD, sub-section (2) of section 80CCH and section 80JJAA — so the additional Rs. 50,000 deduction under s.80CCD(1B) is not available in the default regime, while the employer's contribution deduction under s.80CCD(2) is. On the ceiling: s.80CCD(2) allows fourteen per cent of salary where the contribution is made by the Central Government or a State Government and ten per cent where it is made by any other employer, but a proviso inserted by Act No. 15 of 2024 with effect from 1 April 2025 provides that where the total income is chargeable to tax under s.115BAC(1A), sub-section (2) has effect as if for the words "ten per cent" in clause (b) the words "fourteen per cent" had been substituted.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.