An employee's own contribution is eligible for a tax deduction --up to 10 per cent of the salary (basic plus DA) - under Section 80CCD(1)1. of the Income Tax Act within the overall ceiling of Rs 1.5 lakh allowed under Section 80C and Section 80CCE.The employer's contribution to NPS is exempted under Section 80CCD 2. Moreover, individuals can claim an additional deduction of up to Rs 50,000 under Section 80CCD (1B), which is in addition to Rs 1.5 lakh permitted under Section 80C.3. A self-employed person can also contribute 10 per cent of his gross income under Section 80CCD (1) in NPS.