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Defered annuity

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MathemaGician

9 Points Posted on 03 June 2021

Question: Mr. A deposits Rs 1,20,000/- in a previous year to effect a contract for the deferred annuity on his life, with a view to receive a cash payment of Rs. 40,000/- in lieu of that payment of annuity in the same previous year. Determine the amount of deduction Mr. A can avail under Chapter-VIA of Income Tax Act, 1961:

(a) Rs. 1,20,000/-
(b) Rs. 1,00,000/-
(c) Rs. 40,000/-
(d) Rs. 80,000/-

Replies (2)

Quick Summary

This discussion clarifies the tax deduction available for a deferred annuity under Chapter VI-A of the Income Tax Act, 1961. Specifically, it addresses a scenario where Rs. 1,20,000 was deposited for a deferred annuity, with an option for a cash payment instead. The consensus is that the deposit amount of Rs. 1,20,000 can be claimed as a deduction under Section 80C.