Amendment of section 80CCD.
36. In section 80CCD of the Income-tax Act, in sub-section (3), the following proviso shall be inserted with effect from the 1st day of April, 2017, namely:-
“Provided that the amount received by the nominee, on the death of the assessee, under the circumstances referred to in clause (a), shall not be deemed to be the income of the nominee.”.
Notes on Clauses:
Clause 36 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of Central Government.
Sub-section (3) of the aforesaid section provides that the whole of the amount standing to the credit of the assesse including the accrual on the amount received by the assesse or nominee is taxed in the year of such receipt on account of closure or his opting out of the pension scheme.
It is proposed to amend the sub-section so as to provide that any amount received by the nominee, on the death of the assessee, under the pension scheme referred to in clause (a) of the said sub-section, is exempt from tax.
This amendment will take effect from 1st April, 2017 and will, accordingly, apply in relation to assessment year 2017-2018 and subsequent years.