TaxTMI 
TaxTMI 
Deduction in respect of contribution to Pension Scheme of Central Government - (New) Section 124 / (Old) Section 80CCD
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.... • 14% of salary where the employer is the Central Government or State Government; and • 10% of salary where the employer is any other employer. • Where an employee's income is taxable under New Regime, Section 202(1), the limit of 10% applicable to non-government employers becomes 14%. • Meaning of Salary includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites. Deduction for Individual's Own Contribution to the Pension Scheme [ Section 124(3), (4) and (8) ] • Any individual may claim deduction up to Rs.50,000 for his own contribution to the notified pension scheme. • Parents or guardians c....
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....ence to such amount shall be allowed under section 123 for that tax year. Taxability of Unified Pension Scheme (UPS) Withdrawals [ Section 124(11) & (12) ] • Amounts received by the assessee or his nominee, in whole or in part, of the Unified Pension Scheme on: • Superannuation; • Voluntary retirement; or • Retirement under Fundamental Rule 56(j), • the whole of the amount shall be deemed to be the income of the assessee or his nominee, as the case may be, in the tax year in which such amount is received, and • shall accordingly be charged to tax as income of that tax year. • Where retirement benefits are merely transferred from the indiv....
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....CE). Explanation: "Salary" includes dearness allowance (if the terms of employment so provide), but excludes all other allowances and perquisites. Section 80CCD(1B) [Additional deduction] Inserted by the Finance Act, 2015 (w.e.f. 01-04-2016), sub-section (1B) provides an additional deduction of up to Rs. 50,000 for contributions to the notified pension scheme, over and above the limits of Section 80CCD(1) • An employee or individual, shall be allowed a deduction in computation of his total income, whether or not any deductions is allowed under Section 80CCD(1) • Amount actual deposited or Rs. 50,000 which ever is less. • On this additional contribution, the ceiling of 1,50,000 under secti....
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....ount received Section 80CCD(3) • The following amount shall be taxable, in the year of receipt, • (a) on account of closure or his opting out of the pension scheme • (b) as pension received from the annuity plan purchased or taken on such closure or opting out • The amount received by the nominee, on the death of the assessee, under the circumstances referred to in clause (a), shall not be deemed to be the income of the nominee. • [The amount received by a person, being the parent or guardian or nominee of a minor, on account of closure of the pension scheme referred to in sub-section (1B) due to the death of the minor, shall not be deemed to be the income of such person....
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....ct, 2013 and the regulations made thereunder, to the extent it does not exceed twenty-five per cent. of the amount of contributions made by him. Section 10(12BA) inserted vide Finance Act, 2025 w.e.f. 01.04.2025 ] Restriction on Double Deduction [section 80CCD(4) ] • From 01.04.2026 :- Where any amount paid or deposited by the assessee in his account or the account of a minor has been allowed as a deduction under section 80CCD(1) or (1B) no deduction with reference to such amount shall be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006. [ Amended vide Finance Act, 2025 ] • Upto 31.03.2025 :- Where ....