Section 80CCC allows a deduction of up to ₹1,50,000 for premiums paid to keep in force an annuity or pension plan of LIC or any IRDAI-registered insurer. But this ₹1.5 lakh is not extra — it sits inside the combined ₹1.5 lakh ceiling of Section 80CCE, shared with 80C and 80CCD(1). It is available to individuals only and only in the old tax regime.
The ₹1.5 Lakh Limit is Shared, Not Separate
The single most common mistake is treating 80CCC as a fresh ₹1.5 lakh on top of 80C. It is not. Section 80CCE caps the total of 80C + 80CCC + 80CCD(1) at ₹1,50,000 together. If your 80C investments already fill that limit, an 80CCC pension premium gives you zero extra benefit.
| Section | What it covers | Limit | Old regime | New regime |
|---|---|---|---|---|
| 80C | PF, PPF, ELSS, LIC premium, tuition, home-loan principal | Shared ₹1.5L (80CCE) | Yes | No |
| 80CCC | LIC / insurer annuity & pension plan premium | Shared ₹1.5L (80CCE) | Yes | No |
| 80CCD(1) | Employee / self NPS contribution | Shared ₹1.5L (80CCE) | Yes | No |
| 80CCD(1B) | Additional own NPS contribution | Extra ₹50,000 | Yes | No |
| 80CCD(2) | Employer NPS contribution | 14% / 10% of salary | Yes | Yes |
80CCD(2) employer NPS is the only one of these that survives in the new (default) regime. Maximum combined deduction in the old regime: ₹1.5L (80CCE) + ₹50k (80CCD(1B)) = ₹2 lakh, plus separate 80CCD(2).
If your 80C is already maxed and you want more tax-free retirement saving, put ₹50,000 into NPS Tier-1 and claim it under 80CCD(1B) — that is a genuine extra ₹50k above the 80CCE ceiling, which an 80CCC pension premium can never give you.
Which Pension Plans Qualify Under 80CCC?
Section 80CCC covers premiums for annuity/pension plans that pay you a pension at retirement — from LIC or any IRDAI-registered insurer. Pure life-insurance, ULIP and ELSS premiums do not come here; they belong under 80C.
✓Qualifies under 80CCC
- LIC annuity/pension plans (e.g. Jeevan Akshay, New Jeevan Nidhi, Jeevan Dhara)
- Private-insurer pension plans (HDFC Life, ICICI Pru, SBI Life, Bajaj Allianz, etc.)
- Deferred and immediate annuity plans that pay a pension at maturity
!Does NOT qualify (goes elsewhere)
- Pure term / endowment life insurance premium → 80C
- ULIP premium and ELSS mutual funds → 80C
- NPS contributions → 80CCD(1) / 80CCD(1B) / 80CCD(2)
If you surrender the pension plan early, the deduction you claimed under 80CCC is added back to your income and taxed in the year of surrender. The pension/annuity you receive after maturity is fully taxable as "Income from Other Sources" at your slab rate — only the premium got the deduction, not the payout.
How the Shared Limit Plays Out
80C already full
Splitting the limit
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80CCC Only Works in the Old Regime
From FY 2023-24 the new regime is the default, and almost every Chapter VI-A deduction — including 80CCC — is switched off there (only 80CCD(2) employer NPS and 80JJAA survive). To use 80CCC you must opt for the old regime. Weigh the deduction against the new regime's lower slab rates before you decide.
Old regime — 80CCC allowed
- 80CCC + 80C deduction up to ₹1.5L (80CCE)
- Plus HRA, 80D, 80CCD(1B), home-loan interest, etc.
- Higher slab rates; deductions do the heavy lifting
New regime — 80CCC blocked
- No 80CCC / 80C / 80CCD(1) deduction
- Only 80CCD(2) employer NPS survives
- Lower slab rates; ₹75k standard deduction; 87A rebate up to ₹12L taxable
For AY 2026-27 keep referring to the familiar Section 80CCC of the Income-tax Act, 1961 — that is the search and filing intent. Under the new Income-tax Act, 2025 (income from 1 April 2026), the equivalent provision is folded into Section 123 read with Schedule XV. The ₹1.5 lakh combined ceiling and old-regime-only rule are unchanged.
How to Claim Section 80CCC in Your ITR
- Choose the old regime while filing (opt out of the default new regime)
- Enter the pension premium under Section 80CCC in Schedule VI-A
- Keep the LIC / insurer premium receipt as proof for the payment year
- Declare it to your employer via Form 12BB so TDS is adjusted in Form 16
- Deduction is allowed in the year of payment, capped within the ₹1.5L 80CCE limit
80CCC is available in ITR-1 (simple salary return) through ITR-4. Enter it in Schedule VI-A and the portal auto-restricts the total to the ₹1.5 lakh 80CCE ceiling. Compare both regimes on the income tax calculator before you lock your choice.
- Section 80CCC & deductions: incometax.gov.in
- Combined ₹1.5L ceiling: Section 80CCE, Income-tax Act 1961
- New-regime restriction: Section 115BAC
- New Act mapping: Section 123 r/w Schedule XV, Income-tax Act, 2025 (from AY 2026-27)
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position with the official source before you act on it.