Income Tax Deduction Under Section 80CCC In India
Close
Close

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.

  • Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

Income Tax Deduction Under Section 80CCC In India

Save Tax Now
  • 1st Oct 2021
  • 66
Income Tax Deduction Under Section 80CCC In India

From a very young age, we are taught about the importance of planning and investing in our future. As we grow and start earning, we begin the hunt for different policies available that can help us make our retirement years peaceful and stress-free. Investing in such plans becomes even more fruitful when we get benefits from them not only in the future but also in the present.

When we think of any term insurance policy or retirement plan, tax benefits always prove to be one of the most valued benefits offered. No discussion about tax saving policies in India can be complete without the mention of Section 80CCC of the Income Tax Act, 1961. This section is read along with Section 80C and Section 80CCD(1) to determine the total exemption value.

A Blessing for Tax-Payers

Answering what is 80CCC in Income Tax Act can be quite daunting for those not well-versed with its nitty-gritties. To put it rather simply, section 80CCC of Income Tax Act provides us with the opportunity to claim certain tax deductions on the money invested in a pension plan or a pension fund. These deductions can be claimed on our current income on the purchase or the renewal of the policy in the applicable financial year. However, we cannot claim deductions under 80ccc in the years we do not pay for the contribution into the policy. In other words, we can only claim the deduction as long as we are actively paying for the fund and not the entire duration of their coverage.

There are certain criteria for the fund, which include:

  • The fund must have been set up on or after 1st August, 1996.
  • The fund must be listed in clause 23AAB of section 10 of the Income Tax Act.
  • It can be by any listed insurer.

Depending on the payment plan we choose, payment can be made either annually or all at once, and this expenditure is usually from our taxable income. The provisions under the Section 80CCC of the Income Tax Act is what allows us to claim deduction on this tax and get what is commonly called the tax rebate. It is important to note that the pension, annuity, any bonuses or interests are still taxable and cannot be claimed for deduction.

Eligibility for Claiming Deduction under 80CCC

  • Any individual taxpayer can claim deduction under 80CCC as long as they have invested in a pension or annuity plan, except for HUF (Hindu Undivided Family).
  • Any resident or nonresident can also claim deduction under 80CCC as long as they have invested in a pension fund.

The maximum deduction under 80CCC Income Tax Act is Rs.1,50,000. As already mentioned, this section is read along with two other sections 80C and 80CCD, accounting for the total deduction.

Income tax rebates have been made more accessible and easier with these provisions which often act as incentives to those investing in various avenues. Section 80CCC is undoubtedly an effective way to reduce our tax burden by investing in a plan that provides financial security during retirement. All you should do is keep track of the amount paid towards your annuity to claim a deduction under this section.

- A Consumer Education Initiative series by Kotak Life

Tags

Also read

  • What are Direct Taxes? How to Avoid being Overtaxed?

    What are Direct Taxes? How to Avoid being Overtaxed?

    Taxes that are levied by the government directly on the individuals are referred to as direct taxes. Direct taxes do not require any third-party inter...

    Read more
  • How to File Income Tax Return

    How to File Income Tax Return

    How to file ITR? Is one of the most common question asked. ITR filling is now very easy and can be done online. Here’s the guide on how to file ITR ...

    Read more

Related Plans

  • Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan - Online Term Insurance

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more
  • Kotak Assured Savings Plan

    Kotak Assured Savings Plan

    Kotak Assured Savings Plan is an affordable protection plan that enables you to accumulate wealth and strengthens your finances for the future.

    Know more