Section 80CCD of Income Tax Act "Deduction in respect of contribution to pension scheme of Central Government"
80CCD. (1) Where an assessee, being an individual
employed by the Central Government on or after the 1st day
of January, 2004 or, being an individual employed by any
other employer, or any other assessee, being an individual
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, 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 so paid or deposited as does not
exceed,-
(a) in the case of an employee, ten per cent of his salary
in the previous year; and
(b) in any other case, twenty per cent of his gross total
income in the previous year.
(1A) [***]
(1B) An assessee referred to in sub-section (1), shall be
allowed a deduction in computation of his total income,
whether or not any deductions is allowed under sub-section
(1), 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:
Provided that no deduction under this sub-section shall be
allowed in respect of the amount on which a deduction has
been claimed and allowed under sub-section (1).
(2) Where, in the case of an assessee referred to in
sub-section (1), the Central Government or any other
employer makes any contribution to his account referred to
in that sub-section, the assessee shall be allowed a
deduction in the computation of his total income, of the
whole of the amount contributed by the Central Government or
any other employer as 21[does not exceed-
(a) fourteen per cent, where such contribution is made by
the Central Government;
(b) ten per cent, where such contribution is made by any
other employer,
of his salary in the previous year.]
(3) Where any amount standing to the credit of the assessee
in his account referred to in sub-section (1) or sub-section
(1B), in respect of which a deduction has been allowed under
those sub-sections or sub-section (2), together with the
amount accrued thereon, if any, is received by the assessee
or his nominee, in whole or in part, in any previous year,-
(a) on account of closure or his opting out of the pension
scheme referred to in sub-section (1) or sub-section (1B);
or
(b) as pension received from the annuity plan purchased or
taken on such closure or opting out,
the whole of the amount referred to in clause (a) or clause
(b) shall be deemed to be the income of the assessee or his
nominee, as the case may be, in the previous year in which
such amount is received, and shall accordingly be charged to
tax as income of that previous year:
Provided that 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.
(4) Where any amount paid or deposited by the assessee has
been allowed as a deduction under sub-section (1) or
sub-section (1B),-
(a) no rebate with reference to such amount shall be allowed
under section 88 for any assessment year ending before the
1st day of April, 2006;
(b) 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.
(5) For the purposes of this section, the assessee shall be
deemed not to have received any amount in the previous year
if such amount is used for purchasing an annuity plan in the
same previous year.
Explanation.-For the purposes of this section, "salary"
includes dearness allowance, if the terms of employment so
provide, but excludes all other allowances and perquisites.