Reportedly “For a pension plan issued by life insurance companies, an individual contribution to the pension fund is deductible under section 80CCC under the overall limit of section 80CCE of INR 150,000. Furthermore the Finance Act 2015 inserted a new sub-section (1B) under Section 80CCD of the Income Tax Act to encourage investment in NPS by any individual by allowing an additional deduction of INR 50,000 over and above the INR 1.5 lakhs available under Section 80CCE of the Act.
Accordingly Life Insurance Council has proposed additional tax deductions of Rs 50,000 over and above the 80C limit on investments made in pension plans of life insurance companies. Meanwhile in its list of expectations from the Union Budget 2020 that the Life Insurance Council has shared with Finance minister nirmala sitharaman, the Council has proposed additional tax deductions of Rs 50,000 over and above the 80C limit on investments made in pension plans of life insurance companies in the line of National Pension System (NPS).
Moreover S N Bhattacharya, Secretary, Life Insurance Council said it is recommended that in order to reduce gap between taxation of pension policies issued by Life Insurance Companies vis-à-vis NPS of the CG, the additional deduction of INR 50,000 for premium paid (as available for NPS) should be extended to pension policies issued by Life Insurance Companies. Perhaps Council wants the Finance minister to consider a separate deduction to be provided for premium paid on individual life policies.