Two separate limits, the same underlying formula
Section 80C caps combined tax-saving investments at ₹1,50,000. Section 80CCD(1B) then allows an additional ₹50,000 specifically for NPS contributions, on top of the 80C limit — a second, separate slab that uses the exact same "investment × marginal rate" tax saving math.
The 80C slab: ₹45,000 saved
A taxpayer in the 30% bracket investing the full ₹1,50,000 under 80C saves ₹45,000 in tax, using the real tax-saving-investment formula.
The NPS 80CCD(1B) slab: an additional ₹15,000 saved
Running the identical real formula a second time — the same 30% marginal rate, but now on a ₹50,000 NPS contribution eligible under 80CCD(1B) — saves an additional ₹15,000, since ₹50,000 is fully within this separate, smaller cap.
The real combined tax saved: ₹60,000
Adding the two real amounts together — ₹45,000 from 80C plus ₹15,000 from NPS's 80CCD(1B) — gives a genuine ₹60,000 in total tax saved from ₹2,00,000 actually invested across the two slabs, at the identical 30% marginal rate.
Why this only works because the caps are separate
This chain is valid specifically because 80CCD(1B) is an *additional* limit exclusively for NPS, not a top-up to the same ₹1,50,000 bucket — trying to claim more than ₹50,000 of NPS contribution under this specific section wouldn't work, since anything beyond that would need to compete for space inside the already-exhausted 80C limit instead.