Sec 80CCE of Income Tax Act, 1961: Limit on deductions under sections 80C, 80CCC and 80CCD.

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The total of all deductions under sections 80C, 80CCC, and 80CCD [other than the deduction for employer contributions and the additional deduction under section 80CCD(1B)] shall not be greater than ₨ 1,50,000.

Illustration: Mr. Vivek is a Govt. Employee with an annual basic salary of ₨ 6,00,000, ₨ 2,00,000 as DA and ₨ 120000 as taxable allowances. His other incomes are ₨1,00,000. The Govt contributes 10% of his basic towards the National Pension Fund while he contributes 10%. He paid ₨ 25,000 as LIC premium ₨ 55,000 as principal amount of Housing loan and deposits, ₨ 60,000 in PPF. Compute his total income.

Solution:

Computation of Total Income of Mr. Vivek