Section 80CCC: Deduction for Pension Plans of Insurers
Pay into an insurer's pension plan, deduct it now, pay tax when the pension comes. Here is the rule.
Section 80CCC of the Income Tax Act, 1961 gives a deduction for money you pay into an annuity plan of LIC or any other life insurer, to receive a pension from the insurer's pension fund. The deduction counts toward the same ₹1,50,000 a year that covers Section 80C and Section 80CCD(1), and it is available only under the old tax regime.
From 1 April 2026, the Income-tax Act, 2025 replaces the 1961 Act. The 80CCC deduction carries on as clause (x) of paragraph 1 of Schedule XV, read with Section 123. The returns for the year ended 31 March 2026 (AY 2026-27) still use Section 80CCC.
You save ₹250
- Full 100-question mocks
- Chapter-wise practice
- Section-wise sets
One payment, no subscription · Valid for 1 month
Section 80CCC in Brief
- What qualifies
- A contribution to effect or keep in force an annuity plan of LIC or any other insurer, for receiving pension from the insurer's pension fund. The 2025 Act adds that the contribution must be made from income chargeable to tax.
- The pension fund
- A fund set up by LIC on or after 1 August 1996, or by any other insurer, under a pension scheme approved by the Controller of Insurance or IRDAI. The fund itself pays no income tax (Schedule VII, Sl. No. 3 of the 2025 Act).
- Deduction limit
- ₹1,50,000 a year, shared with Section 80C (life insurance premium, PF, ELSS and the rest) and Section 80CCD(1) (your own NPS contribution).
- Tax regime
- Old regime only. Under the new regime, the only pension deduction left is 80CCD(2), the employer's NPS contribution.
- Tax on the way out
- When you surrender the plan, in whole or in part, or receive the pension, the whole amount received is taxed as your income (or your nominee's) in that year.
Section 80CCC Under the Income-tax Act, 2025
The 2025 Act came into force on 1 April 2026 and repealed the 1961 Act. The rule is the same; the address has changed.
The deduction
Income Tax Act, 1961
Section 80CCC
Income-tax Act, 2025
Section 123, Schedule XV, para 1(x)
Combined ₹1,50,000 cap
Income Tax Act, 1961
Section 80CCE (80C + 80CCC + 80CCD(1))
Income-tax Act, 2025
Section 123: the aggregate of all Schedule XV sums, up to ₹1,50,000
Tax on surrender or pension
Income Tax Act, 1961
Section 80CCC
Income-tax Act, 2025
Schedule XV, para 5, Table Sl. No. 2
Insurer pension fund exempt
Income Tax Act, 1961
Section 10(23AAB)
Income-tax Act, 2025
Schedule VII, Table Sl. No. 3
Not allowed in the new regime
Income Tax Act, 1961
Section 115BAC
Income-tax Act, 2025
Section 202(2)
| Rule | Income Tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| The deduction | Section 80CCC | Section 123, Schedule XV, para 1(x) |
| Combined ₹1,50,000 cap | Section 80CCE (80C + 80CCC + 80CCD(1)) | Section 123: the aggregate of all Schedule XV sums, up to ₹1,50,000 |
| Tax on surrender or pension | Section 80CCC | Schedule XV, para 5, Table Sl. No. 2 |
| Insurer pension fund exempt | Section 10(23AAB) | Schedule VII, Table Sl. No. 3 |
| Not allowed in the new regime | Section 115BAC | Section 202(2) |
Quick practice on accounts and ratios. No signup.
How an 80CCC Pension Plan Works for Tax
- 1
You pay into the insurer's pension plan
Each year's contribution, from taxable income, can be claimed as a deduction under the old regime, within the shared ₹1,50,000.
- 2
The money grows in the insurer's pension fund
The fund is exempt from income tax while it builds up, including the interest or bonus credited to your account.
- 3
You receive pension, or you surrender
Whatever you receive, whether pension from the annuity plan or the amount paid out on a full or partial surrender, is taxed as income in the year you receive it.
- 4
On your death
If the amount is received by your nominee, it is taxed as the nominee's income in that year.
Exam Traps
80CCC is for an insurer's pension (annuity) plan; 80CCD is for the Central Government's pension scheme (NPS); 80C is for life insurance premium. 80CCC's own limit is ₹1,50,000, the same figure as the combined cap, so it can never add to it. It is an old-regime deduction. The deduction is given when you pay in, and the pension or surrender value is taxed when it comes out.
FAQs
What is Section 80CCC of the Income Tax Act?expand_more
A deduction for an individual's contributions to an annuity plan of LIC or any other insurer, bought to receive a pension from the insurer's pension fund. It counts toward the ₹1,50,000 combined limit with 80C and 80CCD(1).
What is the deduction limit under 80CCC?expand_more
₹1,50,000 a year, and that is the combined limit for 80C, 80CCC and 80CCD(1) together. If your 80C investments already use up ₹1,50,000, an 80CCC contribution adds no further deduction.
Can I claim 80CCC under the new tax regime?expand_more
No. Under the new regime, 80C, 80CCC and 80CCD(1) are not allowed. The only pension deduction left is 80CCD(2), for the employer's NPS contribution.
Is the pension from an 80CCC plan taxable?expand_more
Yes. The pension received, and any amount received on surrender of the plan, is taxed as income in the year it is received. If your nominee receives it, it is the nominee's income.
What is the difference between 80C and 80CCC?expand_more
80C covers a list of items, including life insurance premium. 80CCC covers only an insurer's pension plan. Both share the same ₹1,50,000 cap, so they are alternatives within one limit, not two separate limits.
What is Section 80CCC called in the new Income-tax Act, 2025?expand_more
It has no section of its own. The same deduction is clause (x) of paragraph 1 of Schedule XV, allowed through Section 123, from the tax year starting 1 April 2026.
Access exam-specific mock tests directly from your Android device.Next steps
Take a full IC-26 mock testFull-length IC-26 practice, timed to 2 hours and scored.