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

Finance Bill 2015 proposes raising Section 80CCC deduction limit from one lakh to 1.5 lakh rupees, effective April 2016. An inquiry was made regarding the changes in the deduction limit under Section 80CCC as per the Finance Bill 2015. The response clarified that under the current provisions, individuals can claim a deduction of up to one lakh rupees for annuity plans with Life Insurance Corporation of India or other insurers. To enhance social security, it is proposed to increase this limit to one hundred and fifty thousand rupees, effective from April 1, 2016, applicable to the assessment year 2016-17 and beyond, within the overall limit of Section 80CCE.