Know about Pension Fund and Contribution to Pension Scheme of Central Government Deductions in Respect of under sec. 80CCC & 80CCD Respectively.

Deduction in Respect of Pension Fund under section 80CCC:
If the following conditions are fulfilled an assessee may claim deduction under this section-

• The taxpayer is an individual
• During the previous year, he has paid/deposited a sum under an annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension.
• If deduction has not been claimed under section 80C.
  

Amount of deduction:
If the aforesaid conditions are satisfied, then

1. the amount deposited
2. or Rs. 10,000,
   

whichever is lower, is deductible.

Tax treatment of pension received
The pension amount received by the assessee or his nominee as pension will be taxable in the year of the receipt.

Deduction in respect of Contribution to Pension Scheme of Central Government under section 80CCD:
This section is for allowing deduction to new central Government employees, if the following conditions are satisfied:

• The taxpayer is an individual
• He is employed by the Central Government on or after January 1, 2004.
• He has in the previous year paid or deposited any amount in his account under a pension scheme notified by the Central Government.
  

Amount of Deduction
The amount deductible is-

1. The total employee’s contribution and employer’s contribution to the notified pension scheme during the year.
2. Or 10% of salary of the employee.
   

Whichever is less

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Salary means basic salary including dearness allowance if under the terms of employment.

• Contribution towards Public Provident Fund qualifies for deduction under Section 80C.
• The aggregate of investments made in schemes qualifying for deduction under Section 80C is known as Gross Total Income
• The aggregate amount of deduction under section 80 C, 80 CCC & 80CCD cannot exceed Rs. 1,50,000.
• The maximum deduction under section 80 CCD in respect of pension scheme of Central Government is 10% of salary.
  

The aggregate amount of deduction under sections 80C, 80CC and 80CCD cannot exceed Rs. 1,00,000.

Posted in: 80 CCC,80 CCD,Deductions Under Chapter-VIA,Sec. 80 C