Section 80CCE of ITA, 1961 : Section 80Cce: Limit On Deductions Under Sections 80C, 80Ccc And 80Ccd

Explanation using Example

Imagine Raj, a software engineer, is planning his taxes for the year. He invests INR 1 lakh in a Public Provident Fund (PPF) under section 80C, pays INR 30,000 towards pension funds under section 80CCC, and contributes INR 50,000 to the National Pension System (NPS) under sub-section (1) of section 80CCD. The total of his investments and contributions is INR 1.8 lakhs.

However, according to Section 80CCE, the maximum deduction he can claim for all these sections combined is limited to INR 1.5 lakhs. Therefore, even though Raj's total qualifying investments are INR 1.8 lakhs, he can only deduct INR 1.5 lakhs from his taxable income for that year.