Deduction u/s 80CCC is available only to individuals for the premium paid to certain pension fund.
Qualifying Pension Fund
Any annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension from a fund referred to in section 10(23AAB). The pension fund set up by the LIC will fall under this scheme.
Source of Payment
Amount of contribution paid or deposited in respect of which deduction has to be claimed must have been paid out of the income chargeable to tax.
Taxability in case of surrendering the annuity
Where the assessee or his nominee surrenders whole or part of the annuity before the maturity date of such annuity, after claiming deduction, the surrender value shall be taxable in the hands of the assessee or his nominee, as the case of may be, in the year of the receipt.
Taxability of Pension received from such plan
If deduction is claimed under section 80CCC, pension received will be taxable in the hands of the assessee or the nominee, as the case may be in the year of the receipt. However, as per section 10(10A), any payment in commutation of pension received from LIC will be exempt.
No deduction under 80C
No deduction will be available u/s 80C for the premium paid on the above policy if the deduction u/s 80CCC has been claimed.
Quantum of Deduction
The maximum amount deductible under section 80CCC is Rs. 1,00,000/-. Moreover, the maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is restricted to Rs. 1,00,000/-.
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