Deduction under Income Tax under 80CCC and 80CCD
Updated: Feb 4, 2021
Deduction in respect of contribution to certain Annuity Plan and Contribution to pension scheme of Central Government.
Section 80 CCC of the Income Tax Act 1961 allows Tax Payer to claim deduction from gross taxable Income for the amount invested in certain pension funds of LIC or any other Insurer. Maximum allowable deduction under this provision is Rs.1,50,000/- per year. This investment includes both new and existing policy that pays pension or a periodical annuity.
Section 80CCC of the Income Tax Act 1961 provides tax deductions for contribution to certain pension funds. The section provides tax deduction up to a maximum of Rs.1.5 lakh per year on expenses incurred in buying a new policy or continuing an existing policy that pays pension or a periodical annuity.
Any Individual (Resident and Non Resident) can claim deduction under this section.
HUF can not claim deduction under this section.
Points to Remember:
The plan must be for receiving pension from a fund referred to in Section 10(23AAB). Amount for policy must have been paid out of income chargeable to tax (deduction cannot exceed the taxable income).
10(23AAB): Any income of a fund set-up by the Life Insurance Corporation of India on or after August 1, 1996 or any other insurer to which contribution is made by any person for receiving pension from such fund, and which is approved by the Controller of Insurance or the Insurance Regulatory and Development Authority, is exempt from tax.