Any individual who contributes to annuity plan of LIC or any other insurer for receiving pension is eligible for deduction upto Rs. 1,50,000 during the relevant previous year.
Additional Points:
- After claiming the deductions under this section, if the annuity plan is surrendered before the maturity then surrender value will be fully taxable in the hands of assesse or nominee during year of receipt.
- If deduction is claimed under this section, then pension received under the annuity plan is also chargeable to tax during the year of receipt.
