Is PRAN Mandatory in ITR Filing AY 2025-26? NPS Guide

ITAI Blogger

May 26, 2026

If you invest in the National Pension System (NPS), you may be wondering: Is PRAN mandatory in ITR filing AY 2025-26 India? With the Income Tax Return (ITR) forms for AY 2025-26 (FY 2024-25) now notified by the Income Tax Department, many taxpayers are confused about whether quoting the Permanent Retirement Account Number (PRAN) is compulsory and how to claim deductions correctly.

This complete guide explains:

Whether PRAN is mandatory in ITR filing AY 2025-26
How to report NPS in ITR-1 and ITR-2 AY 2026-27
NPS contribution tax deduction under Section 80CCD(1) and 80CCD(1B)
Difference between Section 80CCD(1) and 80CCD(2) employer contribution
NPS Tier 1 vs Tier 2 tax benefits in India 2026
Maximum NPS tax deduction limit ₹1,50,000 and additional ₹50,000 under 80CCD(1B)

Let’s break it down step by step.

Is PRAN Mandatory in ITR Filing AY 2025-26 India?

Short answer: PRAN is not mandatory for everyone, but it becomes practically necessary if you are claiming NPS deductions.

The Permanent Retirement Account Number (PRAN) is a 12-digit unique number issued by the Pension Fund Regulatory and Development Authority (PFRDA) when you open an NPS account. It functions like a pension account number for your NPS investments.

As per the latest ITR utilities released by the Income Tax Department, the ITR forms:

Do not explicitly mandate PRAN as a compulsory field for all taxpayers.
However, if you claim deduction under Section 80CCD(1), 80CCD(1B), or 80CCD(2), the utility may require details of the NPS account.
In pre-filled ITRs, NPS contributions reflected in Form 16 or AIS (Annual Information Statement) may auto-populate.

When is PRAN required?

You should keep your PRAN ready if:

You are claiming deduction under Section 80CCD(1)
You are claiming the additional ₹50,000 under Section 80CCD(1B)
You want to reconcile NPS contribution mismatch in AIS
You are responding to a tax notice regarding NPS deduction

Even if PRAN is not always a mandatory field, practically you cannot correctly report NPS without it.

How to Link PRAN with PAN for Income Tax Return Filing

Your PRAN is generally linked with your PAN at the time of NPS registration. PAN is mandatory for opening an NPS account as per PFRDA regulations available at the PFRDA official website.

Steps to ensure PRAN-PAN linkage:

Log in to the CRA (Central Recordkeeping Agency) portal.
Check profile details under “Personal Details”.
Verify PAN is correctly mapped.
Ensure employer has correctly reported NPS contributions in Form 16 (if salaried).

If your PAN and PRAN are not correctly linked, your NPS deduction may not reflect in AIS, leading to mismatch during ITR filing.

NPS Contribution Tax Deduction Under Section 80CCD(1) and 80CCD(1B)

One of the biggest reasons taxpayers search “Is PRAN mandatory in ITR filing AY 2025-26?” is to claim maximum tax deduction.

Let’s understand the sections clearly.

1. Section 80CCD(1) – Within ₹1,50,000 Limit

This deduction is part of the overall Section 80C limit of ₹1,50,000.

You can claim:

Up to 10% of salary (Basic + DA) for salaried individuals
Up to 20% of gross total income for self-employed individuals
Subject to overall cap of ₹1,50,000 under Section 80C + 80CCC + 80CCD(1)

Example:

If your basic salary + DA = ₹8,00,000
10% eligible = ₹80,000

You can claim ₹80,000 under Section 80CCD(1), within the ₹1,50,000 limit.

2. Section 80CCD(1B) – Additional ₹50,000 Benefit

This is over and above the ₹1,50,000 limit.

Maximum deduction: ₹50,000
Exclusive to NPS (Tier 1 only)

So effectively, the Maximum NPS tax deduction limit ₹1,50,000 and additional ₹50,000 under 80CCD(1B) allows:

₹1,50,000 under 80C basket
₹50,000 extra under 80CCD(1B)

Total possible deduction = ₹2,00,000

This makes NPS one of the most tax-efficient retirement products in India.

Difference Between Section 80CCD(1) and 80CCD(2) Employer Contribution

Many salaried taxpayers confuse these sections.

Here’s a clear comparison:

Particulars	80CCD(1)	80CCD(2)
Who contributes?	Employee	Employer
Limit	Within ₹1,50,000	Separate benefit
Deduction cap	10% of salary	Up to 10% of salary (14% for Central Govt employees)
Included in 80C limit?	Yes	No

Key Benefit of 80CCD(2)

Employer contribution:

Is not part of ₹1,50,000 limit
Allowed as deduction up to:
- 10% of salary (private sector)
- 14% of salary (Central Government employees)

This makes 80CCD(2) highly beneficial for corporate employees.

Refer to Section 80CCD details under the Income Tax Act on incometaxindia.gov.in.

How to Report NPS in ITR-1 and ITR-2 AY 2026-27

If you are filing return for AY 2025-26 (FY 2024-25), here is how to report NPS correctly.

In ITR-1 (Sahaj)

Suitable for salaried individuals with income up to ₹50,00,000.

Go to:

Deductions → Chapter VI-A → Section 80CCD

Enter:

Amount under 80CCD(1)
Additional amount under 80CCD(1B)

If employer contribution exists:

It is generally pre-filled from Form 16 under 80CCD(2)

In ITR-2

Used by individuals with capital gains, multiple house properties, or income above ₹50,00,000.

Steps:

Go to “Schedule VI-A”
Enter:
- 80CCD(1)
- 80CCD(1B)
- 80CCD(2) (if applicable)
Cross-check with AIS and Form 16

Always verify your deduction does not exceed permissible percentage of salary.

Official utilities are available at the Income Tax e-filing portal.

NPS Tier 1 vs Tier 2 Tax Benefits in India 2026

Another common question: Which NPS account gives tax benefits?

Tier 1 Account

Mandatory for tax benefits
Lock-in till age 60
Eligible under:
- 80CCD(1)
- 80CCD(1B)
- 80CCD(2)

Tier 2 Account

Voluntary savings account
No tax deduction (except certain government employees)
Flexible withdrawals

So if you are asking Is PRAN mandatory in ITR filing AY 2025-26 India, remember:

Only Tier 1 contributions are relevant for claiming tax deduction in your ITR.

What Happens If You Claim NPS Without PRAN?

If you claim deduction but:

Contribution does not reflect in AIS
Employer has not reported it in Form 16
Amount exceeds allowed limits

The CPC (Centralized Processing Centre) may:

Disallow excess deduction
Issue intimation under Section 143(1)
Adjust refund

Hence, while PRAN may not be visibly “mandatory”, it is critical for documentation and compliance.

Practical Example: Maximising NPS Tax Benefit

Rahul (private employee):

Basic + DA: ₹10,00,000
Employee NPS contribution: ₹1,50,000
Employer NPS contribution: ₹1,00,000

Tax benefit:

₹1,50,000 under 80CCD(1)
₹50,000 under 80CCD(1B)
₹1,00,000 under 80CCD(2)

Total deduction = ₹3,00,000

This significantly reduces taxable income and overall tax liability under old regime.

Note: NPS deductions are primarily beneficial under the old tax regime, as the new regime under Section 115BAC has limited deductions. Check regime applicability on the CBDT website.

Key Takeaways for AY 2025-26

PRAN is not universally mandatory, but essential for claiming NPS deduction.
Maximum NPS tax deduction = ₹2,00,000 (₹1,50,000 + ₹50,000).
Employer contribution under 80CCD(2) is additional and highly beneficial.
Only Tier 1 qualifies for tax benefits.
Always match ITR details with AIS and Form 16.

Final Answer: Is PRAN Mandatory in ITR Filing AY 2025-26?

To conclude, Is PRAN mandatory in ITR filing AY 2025-26 India?

Not compulsory for all taxpayers.
Effectively required if you are claiming deduction under Section 80CCD(1), 80CCD(1B), or 80CCD(2).
Essential for accurate reporting in ITR-1 and ITR-2 AY 2026-27.

If you are investing in NPS, ensure your PRAN is active, linked with PAN, and contributions are properly reflected before filing your return. Correct reporting helps you maximise the NPS contribution tax deduction under Section 80CCD(1) and 80CCD(1B) and avoid notices.

Planning to claim the Maximum NPS tax deduction limit ₹1,50,000 and additional ₹50,000 under 80CCD(1B) this year? Review your PRAN details today and file your ITR accurately for AY 2025-26.

This content is AI Generated, use for reference only.