Section 80CCC Deduction

Section 80CCC of the tax Act of 1961 provides deductions of up to Rs. 1.5 lakhs every year for contributions made by a person towards specified pension funds that are offered by life assurance. The deduction is within the threshold of section 80C.

Table of contents

[ Hide ]

What is Section 80CCC

Terms and Conditions of Section 80CCC

What is Section 10 (23AAB)

Eligibility for Deduction Under Section 80CCC

Important Points associated with Section 80CCC

What is Section 80CCC?

The Section 80CCC exemption limit includes the money spent on the acquisition of a replacement policy or payments made towards the renewal or continuation of an existing policy.

The primary condition for availing of this exemption is that the policy that the money has been spent must be providing a pension or a periodical annuity.

Section 80CCC is read together with Section 80C and Section 80CCD(1), thereby limiting the overall exemption limit to Rs. 1,50,000/- once a year.

Terms and Conditions of Section 80CCC

Following are the conditions applicable under the Act: –

Available to those individuals who have paid the sum for renewal or purchase of an insurance policy from their taxable income.

The payment of accounts from the policy should be made as per the terms of Section 10 (23AAB) from the collected funds.

If any bonuses are received or interest is accrued, it’s not eligible for deduction under Section 80CCC.

Any amount received from the policy as a monthly pension is responsible for taxation as per the prevailing rates.

If the policy is surrendered, the number would even be subject to taxation.

Any rebates that were available on investment in annuity plans before April 2006 aren’t allowed under Section 88.

Any amount deposited before April 2006 isn’t eligible for deduction.

What is Section 10 (23AAB)

The provisions of Section 10 (23AAB) are naturally linked with Section 80CCC. It relates to the income received from a fund that has been organized by a recognized insurer, including the LIC.

The fund must are founded before August 1996 as a pension scheme. The contributions made by the taxpayer to the policy must be with the intention of earning pension income in the future.

Section 80CCC Deduction

Eligibility for Deduction Under Section 80CCC

The conditions regarding eligibility for deductions are:

An individual taxpayer who has subscribed to an annuity plan which has been offered by an approved insurer.

HUF or Hindu Undivided Family isn’t eligible for exemption under Section 80CCC.

These provisions apply to both residents likewise as non-residents.

Important Points associated with Section 80CCC

Here are some essential points that you just must know regarding the applicability of the 80CCC Section:

The deduction limits available under Section 80CCC are clubbed along with Section 80C and Section 80CCD (1) to see the whole deduction limit available.

The provisions of Section 80CCC are specifically applicable to those insurance providers in India that supply annuity or pension plans. The insurer can be a public Sectiontor entity or a non-public Sectiontor entity similarly.

The deductions are applicable for the premium/sum acquired the preceding Assessment Year only. as an example, if a person pays the sum for 2-3 years together, then the deduction can only be claimed for the number that pertains to the preceding year only.

The maximum limit available deduction under this Section is Rs. 1,50,000/- once a year.

With the provisions of Section 80CCC, you’ll save a big sum of cash towards your taxation liability.

To be eligible to avail of this exemption, you want to keep a record of the transaction for the payment of cash towards the insurance.

Under no situation can the exemption limit surpass the income of the individual. together with Section 80CCC, there are several other provisions also under the taxation Act to assist you to save your taxation liability.