5-910878
Dear Sirs:
Re: Paragraph 147.2(4)(c) of the Income Tax Act (the "Act"
This is in reply to your letter of March 21, 1991, concerning contributions to registered pension plans ("RPP") in excess of $3,500 per annum in respect of current service for 1985 and prior years.
The maximum deduction that an individual may claim under paragraph 147.2(4)(c) in a year is limited to the lesser of
a) the amount of all contributions (other than ABC's, prescribed contributions and contributions deductible under paragraph 147.2 (4)(b) of the Act) made by the taxpayer after 1962 in respect of years of service prior to 1990, minus deductions previously claimed in respect of those contributions, and
b) $3,500 minus the total of deductions claimed under paragraphs 147.2(4)(a) and (b) of the Act in computing the taxpayer's income for the year.
Accordingly, the excess of required pension contributions over $3,500 made in 1963 and subsegment years will be deductible from the taxpayer's income to the extent provided by paragraph 147.2(4)(c) of the Act.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch