Amendment of section 80CCD.
20. In section 80CCD of the Income-tax Act, in sub-section (2), for the words “Central Government” wherever they occur, the words “Central Government or the State Government” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2020.
Notes on Clauses:
Clause 20 seeks to amend section 80 CCD 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, inter alia, provides that in respect of any contribution made by the Central Government or any other employer to the account of the employee under a notified pension scheme, 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 it does not exceed fourteen per cent. or any other employer as it does not exceed ten per cent. of his salary in the previous year.
It is proposed to amend the said sub-section so as to provide that the deduction under the said section shall be allowed to the assessee, in respect of any contribution made by the State Government also to the account of the employee under a notified pension scheme, of the whole of the amount contributed by the State Government as it does not exceed fourteen per cent. of his salary in the previous year.
This amendment will take effect retrospectively from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
