Applicable to: All Individual & HUF Taxpayers
This section caps the total deductions available under three popular investment sections to prevent excessive tax benefits.
Key Rules of Section 80CCE
1. Combined Deduction Limit: ₹1.5 Lakh
- Applies to the sum of deductionsunder:
- Section 80C(ELSS, PPF, LIC, etc.)
- Section 80CCC(Pension plans)
- Section 80CCD(1)(Employee’s NPS contribution)
| SECTION | COVERAGE | SHARED LIMIT? |
| 80C | PPF, ELSS, LIC, Home Loan Principal, etc. | ✅ Yes (Part of ₹1.5L) |
| 80CCC | IRDAI-approved Pension Plans | ✅ Yes (Part of ₹1.5L) |
| 80CCD(1) | Employee’s NPS Contribution | ✅ Yes (Part of ₹1.5L) |
| 80CCD(1B) | Additional NPS Contribution | ❌ No (Extra ₹50K) |
| 80CCD(2) | Employer’s NPS Contribution | ❌ No (Separate benefit) |
2. Additional ₹50,000 Deduction (80CCD(1B))
- Exclusive of ₹1.5L limit
- Available only for NPS/Tier-1 accounts
- Total possible deduction:₹2 lakh (₹1.5L + ₹50K)
3. Employer NPS Contribution (80CCD(2))
- Not counted in ₹1.5L limit
- Tax-free up to 10% of salary (Basic + DA)
Tax-Saving Strategy Using 80CCE
Scenario 1 (Salaried Employee)
- 80C Investments (PPF/ELSS):₹1.2L
- 80CCC (Pension Plan):₹0.3L
- 80CCD(1) (NPS Employee Contribution):₹0.5L
- 80CCD(1B) (Extra NPS):₹50K
- Employer NPS Contribution:₹1L (tax-free)
Total Deduction:
- ₹1.5L (80C+80CCC+80CCD(1)) + ₹50K (80CCD(1B)) = ₹2L
- Plus ₹1L employer NPS(tax-free income)
Scenario 2 (Self-Employed)
- 80C (ELSS + Home Loan):₹1.5L
- 80CCD(1) (NPS):₹0.5L (20% of income)
- 80CCD(1B) (Extra NPS):₹50K
Total Deduction:
- ₹1.5L (max allowed) + ₹50K = ₹2L
Common Mistakes to Avoid
- Double-Counting
- Don’t claim the same investment under both 80C and 80CCC.
- Ignoring Employer NPS
- Many forget that employer contribution doesn’t eat into ₹1.5L limit.
- Missing Extra ₹50K (80CCD(1B))
- Self-employed can claim this beyond ₹1.5L.
Comparison with Other Tax Regimes
| FEATURE | OLD TAX REGIME | NEW TAX REGIME |
| 80C/80CCC/80CCD(1) Deduction | ✅ Yes (₹1.5L) | ❌ No |
| 80CCD(1B) (Extra NPS ₹50K) | ✅ Yes | ✅ Yes |
| Employer NPS Benefit | ✅ Yes | ✅ Yes |
Note: New regime disallows 80C/80CCC/80CCD(1) but retains 80CCD(1B).
Conclusion
- ₹1.5L is the maxfor 80C+80CCC+80CCD(1).
- Extra ₹50Kavailable via NPS (80CCD(1B)).
- Employer NPSis an additional tax-free benefit.
