Section 80CCC of Income Tax Act

Section 80CCC deals with the incomes and deductions in respect of contributions to approved Pension Funds by an individual. The tax benefits under Section 80CCC are allowed to an individual assessee in the previous year, if he or she has paid or deposited certain amount from his earnings chargeable to tax to an annuity plan of LIC of India or other insurer particularly for acquiring pension from fund which is mentioned to in clause (23AAB) of Section 10. Earlier the maximum amount of deduction under Section 80CCC was Rs. 1 Lac but the limit has been increased to Rs. 1.5 Lacs in Budget 2015.

Conditions to Claim Deduction under Section 80CCC

  1. The deduction under Section 80CCC is available for any contributions made to an annuity plan of LIC or any other for receiving pension from the funds set up by LIC of India or any other insurer under clause 23AAB of Section 10.
  2. Section 80CCC deduction is available to an individual assessee. Thus HUF’s are not allowed any tax benefits u/s 80CCC. Moreover, even the Non-resident Individuals who are contributing towards Pension Funds may claim deduction u/s 80CCC.

Eligible amount of deduction under Section 80CCC

The sum of 80CCC deductions along with the deduction available u/s 80C and 80CCD cannot go beyond Rs. 1.5 lakhs.

Thus eligible amount of deduction u/s 80CCC is lower of the following two cases :

  1. Sum of the all contributions made under section 80C, 80CCD and 80CCC (i.e. contribution to pension funds).
  2. Rs. 1,50,000.

Section 80CCC: Important Points

  1. If any person or his nominee receives any amount from the said fund whether principal or interest or bonus on account of the following two instances, then such sum shall be taxable in the year of receipt of income.
    • Amount received on account of surrender of annuity plan.
    • Amount received as pension from the annuity plan.

    On the other hand, if no deduction has been claimed in respect of such contributions then the amount so received shall not be taxable.

  2. If deduction u/s 80CCC has been claimed in respect of any contributions to an annuity plan of LIC, then deduction u/s 80C cannot be claimed for the same contributions.
  3. It is important to note that deduction u/s 80CCC can be claimed in that year in which the particular amount has been paid. For instance, if a taxpayer fails to remember and contribute to pension fund in the year 2013 and in the year 2014 he pays the sum for both 2013 and 2014, then he is not eligible to claim deduction under this section and moreover he is eligible to claim deduction in 2014 for the complete amount paid in 2014 during the filing of Income Tax return.

On the whole, section 80CCC of pension fund was basically introduced to persuade the taxpayers to put in their income to Pension Funds and thus secure their future.

Filing of Income Tax Returns in India May 1, 2015

Tax Exemption under Section 80C May 15, 2015



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