What Is 80CCC in Income Tax?

If you’re saving for retirement and wondering whether the money you pay into a pension plan helps reduce tax, the answer is: yes — sometimes. Section 80CCC of the Income Tax Act allows individual taxpayers to claim a deduction for amounts paid toward specified pension or annuity plans offered by approved insurers. This deduction helps you reduce your taxable income today while building a retirement income stream for the future.

Quick, simple facts

• What it covers: Premiums/contributions to eligible pension or annuity plans offered by life insurers.
• Who can claim it:Only individuals (not HUFs, firms or companies).
• Limit: The deduction for 80CCC is subject to the combined ₹1.5 lakh limit that covers Section 80C + 80CCC + 80CCD(1). (So you don’t get ₹1.5 lakh extra — it’s shared.)
• Tax when you receive pension: The pension you later receive is taxable as income in the year you receive it (i.e., you get tax benefit on contribution, not income).

How 80CCC works short example

Ravi invests:

• ₹80,000 in PPF (eligible under 80C) and
• ₹60,000 as premium for a pension annuity plan (claims under 80CCC).

Total = ₹1,40,000 → This entire amount can be claimed within the ₹1.5 lakh combined limit under 80C/80CCC/80CCD(1). If Ravi had invested another ₹20,000 in an ELSS, his combined total would reach ₹1.6 lakh — only ₹1.5 lakh would be allowed as deduction.

80C vs 80CCC vs 80CCD quick comparison table

(Use this table as a short visual — readers and search engines like clear, scannable info.)

Pros & cons — is 80CCC right for you?

Pros

• Encourages retirement savings with an immediate tax benefit.
• Works well if you want guaranteed pension-like payouts (annuity).

Cons

• Contribution reduces tax now, but pension payouts are taxable later.
• Funds locked into an annuity/pension structure — less liquidity vs PPF/ELSS.
• Competes with other 80C uses for the same ₹1.5 lakh limit, so it may not always be tax-efficient.