For tax year 2026-27, an individual who has opted out of the default regime under section 202 pays ₹1,00,000 for a pension annuity plan of an insurer under item (x) of Schedule XV and ₹1,00,000 into…
Question and options
For tax year 2026-27, an individual who has opted out of the default regime under section 202 pays ₹1,00,000 for a pension annuity plan of an insurer under item (x) of Schedule XV and ₹1,00,000 into his Public Provident Fund account. How much can he deduct under section 123 of the Income-tax Act, 2025 for these two payments?
₹1,00,000
₹2,50,000
₹1,50,000
₹2,00,000
Answer and explanation
Under the Income-tax Act, 2025 the pension annuity plan contribution is one of the Schedule XV items, so it shares the single ₹1,50,000 ceiling of section 123 with the Public Provident Fund deposit. The two payments total ₹2,00,000 but only ₹1,50,000 is deductible. ₹2,00,000 would be right only if the annuity contribution had a separate limit outside section 123.
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