Important Keyword: 80CCH, Agnipath, Agniveer, Deduction.
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Section 80CCH: Deduction for Agniveer
India’s youthful population is set to play a crucial role in building a self-reliant and strong nation. The Agnipath scheme is crafted to help them move towards this ambitious goal. This program offers a unique chance for young Indians to realize their dreams of joining the Armed Forces and serving the country. One of the benefits included in the Agnipath scheme is a tax deduction under Section 80CCH of the Income Tax Act.
Agnipath Scheme
Launched by the Indian Government on June 14, 2020, the Agnipath scheme aims to recruit young individuals into the armed forces. It is open to those aged between 17.5 and 21 years. This innovative initiative follows a tour-of-duty model, allowing recruits to serve as soldiers across the three branches of the armed forces. After completing a 4-year service period, 25% of these recruits, known as “Agniveers,” will have the opportunity to join the regular armed forces cadre.
Agniveer Corpus Fund
Participants in the Agnipath scheme are entitled to receive a SevaNidhi, a lump sum granted after their 4-year service term. To be eligible, participants must contribute 30% of their monthly earnings to the Agniveer Corpus Fund. The central government matches this contribution, effectively doubling the amount in each participant’s account. The fund comprises contributions from both the individual and the government, along with the accrued interest on these contributions.
Deduction under Section 80CCH
The Income Tax Act offers various deductions, including one under Section 80CCH. This section allows for tax deductions on the total contributions made by both the participants and the Central Government to the Agniveer Corpus Fund. Any individual who is part of the Agnipath Scheme, contributing to the Agniveer Corpus Fund on or after November 1, 2022, and making deposits during the preceding year, is eligible for this deduction.
These amendments took effect on April 1, 2023, and will continue to be valid for future assessment years.
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Official Income Tax Return filing website: https://incometaxindia.gov.in/
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