Under Section 80CCD(2), the deduction is available on employer's contribution to NPS (National Pension Scheme).

An employer can make contributions towards NPS in addition to those made towards PPF and EPF. The contribution made by the employer can be equal to or higher than the employee's contribution. 

Section 80CCD(2) applies to only salaried individuals and not to self-employed individuals.

The deductions under this section can be availed over and above those of Section 80CCD(1).
Section 80CCD(2) allows a salaried individual to claim the following deduction:

  1. Central Government or State Government Employer: Up to 14% of their salary (basic + DA)
  2. Any other employer: Maximum deduction of 10% of salary (basic + DA)