Employer NPS — up to 14% of salary, tax-free (Section 124, old 80CCD(2))

The deduction

• Up to 14% of salary (basic + DA) contributed by the employer to your NPS Tier-I is fully deductible.
• It is over and above your own 80C (₹1.5L) and 80CCD(1B) (₹50k).
• Unlike almost every other deduction, it works in both the old and the new regime.

Worked example

On a ₹12,00,000 basic, a 14% employer-NPS contribution = ₹1,68,000 of tax-free salary — saving roughly ₹1.68L × your slab rate every year, even on the new regime.

How to use it

Ask your employer to restructure CTC to route up to 14% into employer-NPS instead of the fully-taxed special allowance. Same CTC, lower tax. Watch the overall ₹7.5 lakh cap on combined employer PF + NPS + superannuation.

Who it helps

Every salaried employee — the single biggest legal lever left in the new regime. See saving salary tax in the new regime.