Amendment of section 80CCD.
24. In section 80CCD of the Income-tax Act, in sub-section (2), for the words “does not exceed ten per cent. of his salary in the previous year”, the words, brackets and letters “does not exceed––
(a) fourteen per cent., where such contribution is made by the Central Government;
(b) ten per cent., where such contribution is made by any other employer, of his salary in the previous year” shall be substituted with effect from the 1st day of April, 2020.
Notes on Clauses:
Clause 24 of the Bill seeks to amend section 80CCD of the Income-tax Act relating to deduction in respect of contribution to pension scheme of the Central Government.
Sub-section (2) of the said section provides that in respect of any contribution made by the Central Government or any other employer to the account of the employee, the assessee shall be allowed a deduction in the computation of his total income, of the whole of the amount contributed by the Central Government or any other employer as does not exceed ten per cent. of his salary in the previous year.
It is proposed to amend the said section so as to provide that in respect of any contribution made by the Central Government to the account of the employee referred to in the section, the assessee shall be allowed a deduction in the computation of his total income, of the whole of the amount contributed by the Central Government as does not exceed fourteen per cent. of his salary in the previous year.
This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
