Raising the limit of deduction under 80CCC

[Admin TMI]

Question - What are the changes in limit of Section 80CCC in Finance Bill 2015 ?

[Admin TMI]

Raising the limit of deduction under 80CCC

Under the existing provisions contained in sub-section (1) of the section 80CCC, an assessee, being an individual is allowed a deduction upto one lakh rupees in the computation of his total income, of an amount paid or deposited by him 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 a fund set up under a pension scheme.

In order to promote social security, it is proposed to amend sub-section (1) of the said section so as to raise the limit of deduction under section 80CCC from one lakh rupees to one hundred and fifty thousand rupees, within the overall limit provided in section 80CCE.

This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.

AI Summary

Deduction limit under section 80CCC increased, expanding allowed pension annuity contributions within the overall section 80CCE ceiling. Amendment increases the permitted deduction under Section 80CCC for individual payments to annuity contracts with insurers for pension receipt, subject to the overall cap under Section 80CCE, with effect from 1st April 2016 for the assessment year 2016-17 and subsequent years.