Income Tax Deduction under section 80CCC in India

Section 80CCC of the Income Tax Act of 1961 provides for deductions amounting to Rs. 1.5 lakhs per year for personal contributions to certain pension funds provided by health insurance. The deduction is within the 80C section limit. This article discusses the income tax deduction under Section 80CCC in India.

What is Section 80CCC?

Section 80CCC exemption limit includes the amount spent on purchasing a new policy or payments made in respect of the renewal or continuation of an existing policy.

The main condition for using this exemption is that the expenditure policy must be a pension or annuity.

Section 80CCC is read in conjunction with Section 80C and Section 80CCD (1), thus limiting the total release limit to Rs. 1,50,000 /- per annum. 

Terms and Conditions for Income Tax Deduction under section 80CCC in India

It follows the terms and conditions applicable under the Act: –

• It is available to those people who have paid a lump sum renewal or purchased life insurance on their taxable income.
• Payment of the policy must be made in accordance with Section 10 (23AAB) funds collected.
• If any bonuses are earned or interest accrues, they are not eligible for deductions under Section 80CCC.
• Any money earned from insurance such as a monthly pension will be taxed according to existing standards.
• If the policy is issued, the amount will also be below tax.
• Any deductions from investment in pension plans prior to April 2006 are not permitted under Section 88.
• Any money deposited before April 2006 is not eligible for deduction.

Eligibility for Income Tax Deduction under section 80CCC in India

The terms and conditions of the exemption are:

• One taxpayer registered for a pension scheme provided by an accredited insurance company.
• The HUF or Hindu Undivided Family is not eligible for exemption under Section 80CCC.
• These provisions apply to both residents and non-residents.

Key Points Relating to Section 80CCC

Here are some important points to know about the application of Section 80CCC:

• The catch limits found under Section 80CCC are attached to Section 80C and Section 80CCD (1) to determine the amount of catch available.
• The provisions of Section 80CCC apply in particular to those insurance providers in India who provide annual income or pension schemes. Insurance can be a State or a private enterprise of the Category as well.
• Deductions apply only to the amount paid / amount paid in the previous Examination Year only. For example, if a person pays a lump sum of 2-3 years together, the deduction can only be claimed in the amount related to the previous year only.
• The maximum amount held under this category is Rs. 1,50,000 / – per annum.
• Section 80CCC of the Income Tax Act of 1961 provides for deductions amounting to Rs. 1.5 lakhs per year for personal contributions to certain pension funds provided by health insurance. The deduction is within the 80C section limit.
• Section 80CCC exemption limit includes the amount spent on purchasing a new policy or payments made in respect of the renewal or continuation of an existing policy.
• The main condition for using this exemption is that the expenditure policy must be a pension or interim pension.
• Section 80CCC is read in conjunction with Section 80C and Section 80CCD (1), thus limiting the total release limit to Rs. 1,50,000 / – per annum.

What is Section 10 (23AAB)?

The provisions of Section 10 (23AAB) are inherently linked to Section 80CCC. It has to do with income from a fund established by a well-known insurer, including LIC.

The fund must have been established before August 1996 as a pension scheme. Contributions made by a taxpayer to the insurer should be for future pension purposes.

Final words

With the provisions of Section 80CCC, you can save a significant amount of money on your tax debt. To be eligible for this exemption, you must keep a work record in order to be paid for insurance. There are no circumstances under which the release limit may exceed the income of an individual. In accordance with Section 80CCC, there are a few other provisions under the Income Tax Act to help you save your tax debt.