What is section 80CCC of the income tax?
Under section 80CCC you can claim an income tax deduction for investments done in certain specified pension funds. These funds include
- The annuity plans of LIC (Life Insurance Corporation of India) and
- Those specified under section10(23AAB) for the income tax act.
Who can claim deduction u/s 80CCC?
For claiming the income tax benefit under section 80CCC you must
- Be an individual As per the provisions of section 80CCC to claim a deduction one must be an individual. It means the non-resident individuals (NRI) can also take benefit from this section.
- Have a taxable income You can claim the tax benefit only when you have taxable income which can be adjusted against this deduction. If your income is below the basic exemption limit then there is no need for claiming the deduction.
- Make a contribution to specified pension funds The tax benefit can be availed only if you invest the money in specified funds during the relevant financial year.
- Make a contribution out of taxable income This is one of the most important points to be considered while claiming deduction under section 80CCC. The investment must be done out of your taxable income and should not be done from any other source.
How to claim tax benefit u/s 80CCC?
Once you have invested the funds u/s 80CCC you need to report the same at the time of filing your Income Tax Return to get the tax benefit. Tax benefit shall only be available on the amount invested and not on the interest or bonus accrued.
What is the tax benefit allowed on investments u/s 80CCC?
The following are the tax implications and benefits u/s 80CCC
- Investment Amount: You get a complete deduction upto Rs 1.5 lakh.
- Pension or Withdrawal amount received: This amount is fully taxable in the hands of the receiver.
- Interest or Bonus Received: The amount received shall also be fully taxable in the hands of the receiver.
Also, no tax benefit under section 80CCC will be allowed if you have already taken the benefit for this deduction under section 80C. The aggregate deduction under section 80C, 80CCC and 80CCD(1) cannot exceed Rs.1,50,000.
Frequently Asked Questions
Questions related to Section 80CCC of the Income Tax Act, 1961 are endless. Here we have curated a list of some of the most frequently asked questions about the same. Hopefully, these will help you curtail confusion to a great extent. Let’s have a quick look –
Q- Under Section 80CCC of the Income Tax Act, 1961, what is a pension fund?
It can be defined as an investment product that provides income after retirement. Under Section 80CCC of the Income Tax Act, 1961, a taxpayer is allowed to claim deductions in tax against the monetary contributions made towards specified pension funds.
Q- What if you are an NRI (Non-Resident Indian)? Are you still entitled to make this claim?
Yes, even if you are an NRI you are entitled to claim a tax deduction under Section 80CCC of the Income Tax Act, 1961.
Q- Can HUF take the tax benefit u/s 80CCC?
HUF (Hindu Undivided Family) are not allowed to claim the tax deductions under Section 80CCC of the Income Tax Act, 1961.
Q- Can you make a claim under both Section 80C as well as 80CCC of the Income Tax Act, 1961?
Yes. However, aggregate limit under sections 80CCC, 80C, and 80CCD is Rs. 1.5 Lakhs.
Q- You are covered by an insurance plan that has nothing to do with pension plans. Can you still claim the tax benefit under Section 80CCC?
Well, the answer is no. You are not allowed to make any tax deduction claim if you have paid towards an insurance plan that’s nowhere related to any pension scheme under section 80CCC.
People also ask
- Deductions under Chapter VI A
- Section 80C: Deductions & Tax Savings Investment Options
- Section 80CCC: Deduction for Contribution towards Pension Funds
- Section 80CCD: Deduction for APY & NPS Contribution
- Section 80CCD(1B) : Deductions & Tax Benefits For NPS Scheme
- Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)
- Section 80RRB: Deductions on Income from Patent Royalty
- Section 80QQB: Deductions for Royalty Income of Authors
- Section 80D: Deduction for Medical Insurance & Preventive Check-Up
- Section 80E: Deduction for Interest on Education Loan
- Section 80EE: Deduction for Interest on Home Loan
- Section 80DD: Deduction for Expenses on Disabled Dependent
- Section 80DDB: Tax Deduction for Specified Diseases
- Section 80U: Tax Deduction for Disabled Individuals
- Income tax deduction under section 80U
- Section 80GG: Deduction for Rent Amount Paid
- Section 80GGA: Deduction for Donation for Scientific Research/Rural Development
- Section 80GGB: Tax Benefits to Indian Companies on Political Donations
- Section 80GGC: Tax Benefits to Individuals on Political Donations
- Section 80TTA: Deduction on Interest for Savings Accounts
- Section 80TTB: Tax Exemption for Senior Citizens on Interest Income
- Section-80-IA: Deductions For Gains From Industrial Undertakings
- Section 80-IC : Deductions For Certain Undertakings in Special States
- Section 80JJAA: Deduction For Employment of New Employees
- Section 80LA : Deduction For Certain Income Of Offshore Banking Units
- Section 80G: Deduction For Donations To Charitable Institutions
- Tax Benefits on Children Education,Tuition & School Fees Under 80C
- Section 80ID: Deduction For Profit From Business Of hotels
- ULIP – Unit Linked Insurance Plan
- Income Tax on Loan Taken from Friends or Relatives
- PPF - Public Provident Fund - Interest, Benefit & Withdrawals
- Tax Benefits On Insurance Policies – Section 80C
- Taxes can help you reduce the cost of your Home!
- Sukanya Samriddhi Yojana
- ELSS - Equity Linked Saving Schemes
- Bank Fixed Deposit - Interest Rates On Bank FD Accounts
- RBI Tax Savings Bonds - How to Invest in 7.75% Savings Bonds?
- Post Office Fixed Deposit: Interest Rates & Benefits
- NSC - National Savings Certificate - Interest & Benefits
- Post Office Tax Saving Investment Schemes - Plans & Benefits
- Post Office Savings Account - Process & Tax Benefits
- Senior Citizen Saving Scheme
- NPS - National Pension Scheme - Login & Benefits
- Universal Account Number (UAN): Activation & Login
- How to add I-SIP URN number in ICICI Netbanking?