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Contribution to Certain Pension Funds – Section 80CCC

U.C Date : 02 May 2015

Eligible assesse – Individual

Under this section deduction is allowed if assesse has paid or deposited an amount  in any annuity plan of the LIC of India or any other insurer for receiving pension from a fund referred to in section10(23AAB).

Amount of deduction is lower of the amount so paid /deposited or Rs. 1,50,000 (Rs. 1,00,000 upto A.y 2015-16). The amount of interest or bonus accrued or credited to account is not deductible.

If the assesse or his nominee receives any amount (including bonus, interest) on surrendering of policy or pension received will be taxable in the hands of recipient in the year of receipt. Such amount is taxable only if deduction was allowed in respect of such amount under this section.

Section 80 CCE – The maximum amount of aggregate deduction under section 80C, 80CCC and 80CCD(1) (i.e employee’s contribution or an individual assessee’s contribution to notified pension scheme of Central Government (NPS) ) cannot exceed Rs. 1,00,000.

Bare Act for Sec 80CCC

Bare Act for Sec 80CCC

(1) Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India [or any other insurer] for receiving pension from the fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of [one lakh] rupees in the previous year.

(2) Where any amount standing to the credit of the assessee in a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee’s account, if any, is received by the assessee or his nominee—

(a)  on account of the surrender of the annuity plan whether in whole or in part, in any previous year, or

(b)  as pension received from the annuity plan,

an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.

[(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section,—

(a)  a rebate with reference to such amount shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;

(b)  a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.

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