Section 80CCC allows for deductions of ₹. 1.5 lakhs per year for donations rendered by a person to defined pension funds.
Section 80 CCC of the exemption limit also covers income spent on the acquisition of a new policy or costs made on the extension or continuity of a current policy. The main criterion for making use of this exemption is that the program for which the money has been invested should be the payment of a pension or a periodic annuity.
Section 80CCC shall be read in accordance with Section 80C and Section 80CCD(1), thus restricting the maximum exemption cap to ₹1,50,000/-per year.
Must Read – What is section 80C?
Section 80CCC Eligibility
The criteria for qualifying for deductions are as follows.
- An individual taxpayer who has contributed to an annuity plan provided via an authorized insurance company.
- HUF or Hindu Undivided Family are not qualified for exemption under Section 80CCC.
- Both residents and non-residents are bound by these rules.
Essential information relating to Section 80CCC
Here are a few important things you need to know about the applicability of Section 80CCC.
- The deduction limits allowed under Section 80CCC shall be defined in accordance with Section 80C and Section 80CCD (1) to assess the overall deduction cap accessible.
- Section 80CCC explicitly refers to insurance companies in India providing annuity or pension schemes. The insurer may either be a public or a private Sectiontor entity.
- The deductions shall refer only to the premium/sum paid for the previous AY. For eg, if a person spends the amounts together for 2-3 years, the deduction will only be obtained for the balance of the previous year.
- The overall deduction available under such a clause is ₹1,50,000/-per year.
Under the terms of Section 80CCC, you will save a considerable sum of cash on your tax liability. In order to qualify for this benefit, you should keep track of the transaction for the payment to the insurance policy. Under no situations, the exclusion cap surpasses the individual’s income. Alongside Section 80CCC, there are a number of other rules underneath the Income Tax Act to assist you to save your tax liability.