How Does Section 80CCC Differ From 80C Of Income Tax Act? Know The Deductions Available

Sections 80C and 80CCC of the Income-tax Act, 1961 allow tax deductions of up to Rs 1.5 lakh in a financial year for contributions towards small savings schemes, pension plans, life insurance policies, etc., by resident and non-resident Indians (NRIs); however, sections 80C and 80CCC have a subtle difference. While section 80C allows deductions for all small savings, insurance and pension plans, 80CCC deductions apply only to annuity policies. Nonetheless, the aggregate deductions of both sections should not exceed Rs 1.5 lakh in a financial year.

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What Does Section 80C &80CCC Offer?

Section 80C of the Act allows tax deductions up to Rs 1.5 lakh in a financial year for contributions to schemes like the National Pension System (NPS), Public Provident Fund (PPF), National Savings Certificate (NSC), Sukanya Samriddhi Yojana, senior citizen savings scheme (SCSS), equity-linked savings schemes, unit-linked insurance plans, tax-saving FDs, etc.

On the other hand, section 80CCC permits deductions within a set criterion. For instance, the contributions must be towards a pension plan of the taxpayer. Under this section, a standard deduction of up to Rs 1.5 is allowed annually. The section applies with 10(23AAB) to pension plans like the NPS, Life Insurance Corporation of India’s (LIC) Jeevan Suraksha plan, etc.

What Is Section 10(23AAB)?

Mansi Rohilla, an accountant at AK & Associates, explains: “Section 10(23AAB)states that the taxpayer should contribute to the policy for pensions. The pension payment will be made from the accrued funds, and any bonus earned shall not be taxed.” She adds that the taxpayer will have to submit premium receipts and other supporting documents to validate their contributions.

Difference Between Section 80C And 80CCC

Basis	Section 80C	Section 80CCC
Eligibility	Individual (Resident/Non-Resident) and HUF (Resident/Non-Resident)	Individuals (Resident/Non-Resident) with policies taken in their names and premiums are paid themselves.
Deductions	Maximum deduction cumulatively u/s 80C, 80CC & 80CCD is Rs 1.5 lakh.	Premium paid is available as a deduction, subject to a maximum of Rs 1.5 lakh.
Investments	NSC, PPF, life insurance premiums, repayment of a housing loan’s principal amount, etc.	Annuity plans such as NPS, Jeevan Suraksha Policy, etc.

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Can You Claim Both 80CCC And 80C?

Rohilla states, “Both sections 80CCC and 80C allow deductions, but their aggregate cannot exceed Rs 1.5 lakh.” However, an additional Rs 50,000 is available for deduction under Section 80CCD (1B) for contributions towards NPS. So, the maximum limit in NPS is Rs 2 lakh.

Section 80CCC doesn’t have any particular objective that sets it apart from 80C, except that it allows deductions for annuity contributions—something that has been in the Act for a long time, adds Rohilla.

Tax