Clause 124 - Deduction in respect of employer contribution to pension scheme of Central Government.

Employer pension contribution deduction clarified, with different limits, individual contribution cap, and tax treatment on withdrawal.

Deduction is allowed for employer contributions to a notified Central Government pension scheme up to prescribed percentage limits of salary-higher where the employer is the Central or State Government and lower for other employers, with a substitution of the higher percentage where the individual's income is charged under the specified provision. Individuals may also deduct their own deposits into such pension accounts up to a fixed annual cap, including guardian deposits for minors subject to the aggregate cap; disallowance of double deduction is provided and closure/withdrawal or annuity receipts are taxed in the year of receipt except on death and where an amount is used to purchase an annuity in the same year.