Pension plan

• Maximum age for maturity: 70 years
• Under section 80 CCC of the Income Tax Act, one can save up to Rs 33,990 from his/her tax annually (calculated on the highest tax bracket) as premiums up to Rs 1,00,000 are allowed as a deduction from the taxable income.
• However, the deductions from income under Sections 80C, 80CCC and 80CCD (for central government employees only) taken together cannot exceed Rs 1,00,000.
• Up to one-third of the maturity amount can be withdrawn in cash and the same is treated as tax-free. But an annuity has to be purchased with the remaining amount. Pension receipts from the same will be treated as income in the hands of the assessee and taxed accordingly.