Invest in 80CCC – Save taxes and secure future

Section 80CCC of Income Tax Act, 1961 provides deduction in respect of contributions to certain Pension funds by an individual assessee.

Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in section 10(23AAB) then he shall be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited.

But, the deduction shall be restricted to Rs. 1,00,000/- as the limit for maximum deduction available under Sections 80C, 80CCC and 80CCD (combined together) is Rs. 1,00,000/- (Rs. one lac only).
Moreover, the deduction u/s 80CCC is allowed only if such amount is paid or deposited by the taxpayer out of his income chargeable to tax and the amount paid or deposited under the said annuity plan will not include interest or bonus accrued or credited to the assessee’s account.

Where the assessee or his nominee after claiming deduction, surrenders the annuity before the maturity date of such annuity, 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.

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