Individuals can look to secure their lives post retirement with investment in pension plan under section 80CCC and also reduce their total tax out-go. Premium paid under the pension plan of LIC or other insurer is totally exempt from income to the extent of Rs. 100,000 (aggregate of Sec 80C, 80CCC and 80CCD) if paid to keep in force a contract for any annuity plan. Section 80CCC provides deductions from total income for amounts paid or deposited by the assessee to any annuity plan of LIC or any other insurer for receiving pension from the fund referred under the Act. Conditions for claiming deduction u/s 80CCC

• The deduction is available to an individual who is resident or non-resident, Indian citizen or foreign citizen;
• The deduction is allowed only if such amount is paid or deposited by the taxpayer out of his income chargeable to tax;
• The maximum amount deductible under section 80CCC is Rs. 100,000.00, subject to a maximum aggregate ceiling of Rs. 100,000 taking into account deductions under 80C, 80CCC and 80CCD; and
• Whole Surrender value or part of the policy received is taxable in the year of receipt in the hands of the assessee or nominee. However, any payment in commutation of pension received from LIC will be exempt.

Thus, pension plans offered by life insurance companies help individuals plan effectively for their tax savings. Therefore one should plan his investments accordingly and make decisions in such a manner that he may get maximum deductions under the Income Tax Act, 1961. Thus, the pension scheme provides dual benefit of both post retirement security and also excellent tax saving. Timely and efficient tax planning go long way in lowering your total taxes by employing and taking advantages of in-built provisions of tax exemptions, deductions, concessions, rebates, relief’s, allowances and other benefits granted by the tax laws so that the incidence of tax is reduced. We at Taxmantra.com have the expertise to guide you in lowering your tax outgo and thus enhancing your total take away.  We at Taxmantra.com provide full year support solving all your tax issues, in addition to filing of your return of income with excellent tax planning. Please join us now in pursuit of simplifying individual taxation! Alok Patnia Founder and Director at Taxmantra.com