1. Applicability:
- Individual employed by Central Government or any other employer on or after 1.1.2004
- W.r.e.f. A.Y. 2009-10, any other individual.
2. Nature of payment: Assesse’s contribution to approved pension scheme of the Central Government or employer’s contribution to Pension Scheme.
3. Amount of deduction:
- For Employees- Amount paid or 10% of Salary, whichever is less
- For others – Amount paid or 10% of Gross total income whichever is less
4. Conditions:
- Taxable when received: Amount received by the individual from such scheme-
- On account closure
- On opting out of such pension scheme
- As pension from the annuity plan purchased or taken on such closure or opting out
- Will be chargeable to tax in the previous year in which it was received
- Contribution u/s 80CCD will not be eligible for deduction under section 80C
- Re-investment: W.r.e.f. A.Y. 2009-10 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.
