• Mar
  • 20
  • 2015

Income Tax Deduction Under section 80CCC and 80CCD

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DEDUCTION UNDER SECTION 80CCC

Deduction in respect of contribution to certain pension funds.

As per section 80CCC, where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax 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 the Fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of one lakh rupees in the previous year.

Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate/ deduction with reference to such amount shall not be allowed under section 88 up to assessment year 2005-06 and under section 80C from assessment year 2006-07 onwards.

Limit- Deduction shall exclude interest or bonus accrued or credited to the employee’s account, if any and shall not exceed Rs. 1 lakh  and The aggregate amount of deduction under sections 80C, 80CCC and sub section (1) of Section 80CCD shall not exceed Rs.1,50,000/- (Section 80CCE). Please note that Limit of deduction Under section 80CCC is enhanced to Rs. 1.50 from One Lakh with effect from assessment year 2016-17 and for subsequent assessment years. Limit of deduction under 80CCC raised to Rs. 1.50 Lakh  

DEDUCTION UNDER SECTION 80CCD

Deduction in respect of contribution to pension scheme of Central Government.

PensionSection 80CCD(1) allows an employee, being an individual employed by the Central Government or by any other employer on or after 01.01.2004, or any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide  Notification No. F.N. 5/7/2003- ECB&PR dated 22.12.2003 (National Pension System –NPS) or as may be notified by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites). The deduction under section 80CCD(1) shall not exceed Rs. 1,00,000/-.

As per Section 80CCD(2), where any contribution in the said pension scheme is made by the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.

If any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above, and the employee or his nominee receives this amount together with the amount accrued thereon, due to the reason of

(i) Closure or opting out of the pension scheme or

(ii) Pension received from the annuity plan purchased and taken on such closure or opting out

then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.

Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

Further it has been specified that w.e.f 01.04.09 that any amount received by the employee from the new pension scheme shall be deemed not to have received in the previous year if such amount is used for purchasing an annuity plan in the same previous year.

It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. However, the deduction under Section 80CCD(1)shall not exceed Rs.1,00000 but contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,00,000/- provided under this Section.

Budget 2015 Proposes Additional deduction of Up to Rs. 50000/- Under Section 80CCD for National Pension System contribution

The existing provisions contained in sub-section (1) of section 80CCD, inter alia, provides that in the case of an individual, employed by the Central Government on or after 1st January, 2004, or being an individual employed by any other employer or any other assessee being an individual who has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, a deduction of such amount not exceeding ten per cent. of his salary is allowed.

It is proposed to omit sub-section (1A) and insert a new sub-section (1B) so as to provide that an assessee referred to in sub¬section (1), shall, be allowed an additional deduction in computation of his total income, of the whole of the amount paid or deposited in the previous year in his account under a pension scheme notified or as may be notified by the Central Government, which shall not exceed fifty thousand rupees. It is also propose to provide that no deduction under this sub-section shall be allowed in respect of the amount on whcih deduction has been claimed and allowed under sub-section (1).

Consequential amendments have been proposed in sub-section (3) and sub-section (4) of section 80CCD.

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. Read more- Sec. 80CCD- Additional deduction for National Pension System contribution.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

(Republished with Amendments)


47 Responses to “Income Tax Deduction Under section 80CCC and 80CCD”

  1. INBASEKAR says:

    Whether 50,000/- investment in 80CCD is over and above the 1,50,000/- investment in 80C & 80CCC

  2. INBASEKAR says:

    50,000/- investment in 80CCD is over and above 1,50,000 investment in 80c

  3. ravi says:

    lic plan new jeevan nidhi’s premium comes under sec 80ccd?

  4. Manoj K Srivatsava says:

    I was contributing to HDPE Personal pension Plan from 2003 , Rs 100000 per year.
    After 2 years this deduction of Rs 10000 was disontinued from 80CCC.
    Please let me know with revised limit of NPD to Rs 1.5 lacs can this be claimed as deduction .

  5. lini says:

    I am a govt employee. If my total salary is 39312 annually and my contribution towards NPS is 45876 and so that is of govt is 45876 If my total saving u/s 80c is 150000. saving u/s 80u is 50000′ Then please calculate my tax. -

  6. JAI says:

    HI,
    **** (1)TO GET BENEFIT OF 80CCD SUB DIVISION (1B), IS IT A MUST THAT ONE HAS TO INVEST IN 80 CCD SUBDIVISION (1)? PLEASE CLARIFY>>>>>>>
    ***** (2) IS 80CCD SUB DIVISION (1B) OVER AND ABOVE THE 80 CCE LIMIT OF 1.5 LAKHS ?

  7. Benny says:

    Hi,

    Appreciate the detailed notes

    Can you help to understand the additional deduction available u/s80CCD (1B).

    Do the assessee needs to invest Rs.2 lakh to get the additional benefit, or the additional benefit can be availed with 1.5 lakh investment in any other fund eg.PPF) and 50K in NPS.

  8. Alok Sharma says:

    Hi
    Government of India & lic of India launch the new policy (yarishta pensions bima yojana) only for seniors citizens Assured return of (9.40 annually) and single premium for monthly pensions
    Regards
    Alok Sharma
    Lic of India (unit 310)
    86 janpath new Delhi 110001
    09716305787
    011.69111166

  9. VISWAJITH says:

    FOR Those central govt employees joined in service prior to 2004 and contributing to gpf, how can they claim the rs 50000/. newly proposed IT exemption under NPS?

  10. Dhaneswar das says:

    Dear sir,
    wheel Calculating total income of salary employees of for TDS purpose. what
    are exemption available for me.

  11. BRIJESH SINGH says:

    Dear sir,

    Kindly suggest me that which NPS plan is better ( LIC or SBI ) to invest for private employee whose age is approx 25 Year and how much amount to invest for a person whose income CTC is 2.5 Lacs.

  12. pritam deshmukh says:

    Respected sir…..I am self employee .my father dependant on me .my father physicaly handicaft am eligibale for 80 ccd…please guide me

  13. gurinder says:

    श्री मान जी
    कृपया मुझे यह बताने का कस्ट करें कि नियोक्ता द्वारा NPS में जमा करवाया गया 10% का contribution, डेढ़ लाख की लिमिट से ऊपर चला जाता है तो क्या यह टैक्स के दायरे में आएगा. मेरी LIC और 10% employee share को जोड़ने पर सेविंग लिमिट डेढ़ लाख आ रही है. अब क्या 10% NPS Employer Share Tax के दायरे में आएगा ? कृपया बताने का कस्ट करें.
    धन्यवाद सहित – See more at: http://taxguru.in/income-tax/income-tax-deduction-section-80ccc-80ccd-80ccf.html#sthash.IZRTK0jG.dpuf

  14. Jai SIngh says:

    Sir,

    I have pay the premium of LIC in the name of Father who has completely depend on me. can i take deduction of the premium deduction.

  15. nirmala says:

    sir,
    I am agovt.employee,has deducted 70000rs for pran this finacial year and 70000rs is contributed from govt…i would like to know if this 70000rs will be dedectued from my gross…and i have a saving of 150000rs so will i be deducting this 150000rs also after deducting 70000rs from my gross…is my pran amount not be included in my 150000 rs saving….pls clear my doubt if the pran amount is to be included or excluded from 150000rs saving…
    regards

  16. Jaffar Sadik says:

    Hi Sir,
    I was salary employed in IT company and worked for 3.5 yrs resigned and joined in another IT organization. I didn’t transferred my EPF to current organization still with old company and about to complete 5yrs. I would like to go for withdrwal my EPF, so is it taxable? How I can get avoid taxable?

    Thanks,
    Jaffar

  17. THUFAIL AHAMED says:

    am a state govt employee. My contribution
    towards cps is Rs 25000/-and +Rs 25000/-
    by employer . Its both total becomes Rs
    50000/-. May I take income tax rebate for Rs
    50000/-in yr 2014-2015 income tax return.

    who are the entities eligible for exception
    under 80 ccd2?

  18. THUFAIL AHAMED says:

    am a state govt employee. My contribution
    towards cps is Rs 25000/-and +Rs 25000/-
    by employer . Its both total becomes Rs
    50000/-. May I take income tax rebate for Rs
    50000/-in yr 2013-14 income tax return.
    please help me.

  19. umesh kumar says:

    श्री मान जी
    कृपया मुझे यह बताने का कस्ट करें कि नियोक्ता द्वारा NPS में जमा करवाया गया 10% का contribution, डेढ़ लाख की लिमिट से ऊपर चला जाता है तो क्या यह टैक्स के दायरे में आएगा. मेरी LIC और 10% employee share को जोड़ने पर सेविंग लिमिट डेढ़ लाख आ रही है. अब क्या 10% NPS Employer Share Tax के दायरे में आएगा ? कृपया बताने का कस्ट करें.
    धन्यवाद सहित

  20. stella janet says:

    I am a state govt employee. My contribution towards cps is Rs 25000/-and +Rs 25000/- by employer . Its both total becomes Rs 50000/-. May I take income tax rebate for Rs 50000/-in yr 2013-14 income tax return.

  21. thomas isaac says:

    who are the entities eligible for exception under 80 c ?
    Are institutions eligible?

  22. Geet Ram Devdutt says:

    Sir, I am central govt. employee Can I get benefit of arrears deposited by employer against NPS contribution under Section 80CCD ii. I joined organisation in 2004-05 and getting rebate on my (employee) NPS contribution right from joining. But my employer deposited his NPS part for the earlier year in this AY year(2014-15).
    Respected sir, please guide me.

  23. Mitan Patel says:

    Dear sir,

    I gets prbs amount Rs.86164 for F.Y. 2010 to 2013 can i claim same as a deduction under section 80ccd(2)

    Thanks

  24. k. apparao says:

    respected sir,
    i am working with ongc since past 2002. during the financial year 2013-14 i received PRBS arrears of RS.448793.27, for the financial year 2006-07 to 2012-13. i wish to know how to claim deduction of the above arrears from my income, either by way of deduction or by way of relief u/s89(1). pl. give me correct guidelines to clam proper refund.
    thanking you,
    yours sincerely,
    k.apparao

  25. k. apparao says:

    Sir, I am central govt. PSU employee. Can I get benefit of Section 80CCD(Employer paid PRBS Amount on behalf of employee)employer contribution of amount Rs448793 for the earlier year but pad in this AY year(2014-15). Pl. guide me. – S

    Respected sir, please guide me about 80ccd I am
    Confused about ongc prbc scheme and how to treat tax to this please contact me –

    kindly do the needful at the earliest.
    yours sincerely,
    k.apparao

  26. hari says:

    Hi,
    I have claiming 80 ccc pension fund under HDFC pension plan but company not allowing the claim since the policy is in the name of wife’s name.

    If the Policy is in the wife’s name it is not allowable what?

    can u please clarify.

    Regards,
    Hari

  27. Ajeet Tripathi says:

    Sir,
    I am an central gorvenment employee.
    Please guide me about 80ccd
    I am confused about ONGC prbc scheme. Please guide me

  28. M J Prajapati says:

    Sir,
    I am central govt. PSU employee. Can I get benefit of Section 80CCD(Employer paid PRBS Amount on behalf of employee)employer contribution of amount Rs483712 for the earlier year but pad in this AY year(2014-15).
    Pl. guide me.
    M J Prajapati
    09427019827

  29. patel jay says:

    Respected sir, please guide me about 80ccd I am
    Confused about ongc prbc scheme and how to treat tax to this please contact me 9537705864

  30. patel jay says:

    Respected sir, please guide me about 80ccd I am
    Confused about ongc prbc scheme and how to treat tax please contact me 9537705864

  31. O P ARYA says:

    Dear Sir,
    My employer has contributed lumpsump amount into pension scheme, notified since 2007, for previous years. The employer has deducted the tax on arears conting all contribution in one financial year. If I can claim a reabate under section 80CCD(2) and bifuricate the pension contribution in previous years.
    Regards.

  32. p. a. master says:

    i am a government servant.my income for financial year 2013-14 is 444330 after deduction under 80(c).can i take deduction of 10000 under 80(ccc){jivan surksha- l.i.c.}from 444330.may i have to submit my annual return for financial year 2013-14 online?

  33. p. a. master says:

    please guide me about 80ccc. i am government servant. my taxable income is 444330.i have invested 10000 in jivan surksha(l.i.c.).can i take 10000 deduction from 444330 for financial year 2013-14.

  34. vinod lohani says:

    hello guru if my gross income is 525500 and my contribution in NPS IS 43000 and gov is 43000 and from LIC i can save rs 100000 then how much i paid in income tex plz reply

  35. PARSHURAM says:

    I am a govt employee. If my total salary is 526000 annually and my contribution towards NPS is 32000 and so that is of govt is 32000. If my total saving u/s 80c is 90000.Then please calculate my tax.

  36. sarda says:

    if i paid lic premium of my son aged 20 year old, can i get income tax deduction u/s 80c

  37. K.Prabhakar says:

    Iam am central govt employee and y gross salary is 35000/- deduction through 80c is 170000/-aggregate deductable amount is 10000/-beside this any more concessions are there if it is there pl inform me otherwise pl tell me what is the amount of income tax to be deducted from my salary

  38. mukesh says:

    As individual if my contribution towards NPS is Rs 1 lakh then how much rebate I will get fron income tax

  39. Neeraj says:

    I am a govt employee. If my total salary is 360000 annually and my contribution towards NPS is 32000 and so that is of govt is 32000. If my total saving u/s 80c is 90000.Then please calculate my tax.

  40. jagjeet says:

    hi…i want to know that the contribution of govt.made in my pran act…is also included in my total income…i mean is govt contribution also a taxable amount.

  41. Krishna Kumar says:

    Please tell me U/s 80ccd(1) & 80ccd(2)Rebate Rs. 1.0 Lac Plus Contribution By Employee & Employer’S For the Financial Year (2012-2013) AY (2013-2014) .

  42. K David Johnson says:

    I am a Tamil Nadu govt employee. My contribution towards CPS is Rs 30000/-and +Rs 30000/- by employer (Govt) . Its both total becomes Rs 60000/-. May I take income tax rebate for Rs 60000/-in yr 2012-13 income tax return. Please give the reply in my mail id kdavidjohnson@gmail.com

  43. Kunal Ray says:

    Hi,
    The question is where to put the govt contribution in SAHAJ form (ITR 1). The said form has only one field for section 80 CCD.

  44. chaudhari parshant says:

    Iam uttarkhand govt.empliyee.my contribution towards nps is rs.31140.00 and rs.31140.00 by employer.Its both total becomes rs.62280.00 may I take income tax rebate for rs. 62280.00 in yr 2011-2012 assesment year 2012-13 under section 80ccd
    pl give information on my email id.

  45. amit says:

    Hi! Only the employer’s contribution is eliglbe for tax rebate under section 80CCD(2)

  46. Sudarsan says:

    Kindly clarify about eligibility of under sec 80CCF  (Investing in Long Term Infra Structure Bond) and investing in Rajiv Gandhi Equity Saving Scheme for the Fin. Year : 2012-13.

    Sudarsan

  47. Avtar Singh says:

    I am a hp govt employee. My contribution towards nps is Rs 25000/-and +Rs 25000/- by employer . Its both total becomes Rs 50000/-. May I take income tax rebate for Rs 50000/-in yr 2011-12 income tax return.

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