Applicable to: Individuals
This section allows a deduction for contributions made to approved pension funds (like LIC Pension Plan, SBI Life Saral Pension, etc.) to encourage retirement savings.
Key Features of Section 80CCC
1. Eligible Investments
- Premiums paidfor annuity plans of IRDAI-approved insurers (e.g., LIC, ICICI Prudential, HDFC Life).
- Must be a pension scheme(deferred annuity plan).
2. Deduction Limit
- Maximum deduction: ₹1.5 lakh per year(shared with Section 80C & 80CCD(1)).
- Total limit under 80C + 80CCC + 80CCD(1) = ₹1.5 lakh.
3. Taxation Rules
- On Maturity:
- Amount received (including annuity) is taxableas income in the year of receipt.
- Exception:If used to buy another annuity, tax is deferred.
- On Surrender/Withdrawal:Fully taxable as income.
4. Lock-in Period
- Until retirement (usually 60 years) or as per policy terms.
Comparison with Other Pension Deductions
| FEATURE | SECTION 80CCC | SECTION 80CCD(1) (NPS) | SECTION 80CCD(1B) (NPS EXTRA) |
| Applicability | Any IRDAI pension plan | National Pension System (NPS) | Additional NPS contribution |
| Max Deduction | ₹1.5L (shared with 80C) | ₹1.5L (shared with 80C) | ₹50,000 (extra) |
| Tax on Withdrawal | Taxable | 60% taxable, 40% tax-free | Same as 80CCD(1) |
| Flexibility | Low (annuity compulsory) | Partial withdrawal allowed | Same as 80CCD(1) |
