Lic's superannuation commuted value and tax

Tax queries 1599 views 2 replies

Rajalakshmi S

Others

24 Points Joined July 2015

Dear Sir,

I served with a MNC 20 years and awaiting superannuation benefits from LIC. As per company's policy I can claim 1/3 as commuted value on retirement. On 2/3 balance I would receive pension. My question is:

1. Is 1/3 commuted value is taxable?

2. Is my pension amount taxable. As per LIC, I would be receiving Rs.3800/- per month as pension.

3. I would be receiving a EPF pension of appx.1500/- per month.

4. Will my nominee get the 2/3 balance amount from LIC on my death?

I greatly appreciate and thank you for your replies.

best regards rajalakshmi

Replies (2)

Rajagopalakrishnan R

PARTNER

1434 Points Joined May 2010

1. Upto 1/3rd of the pension can be commuted and be tax free I.e no tax on upto 1/3rd of pension commuted

2. if the pension scheme was a contributory scheme, i.e if you had contributed to the scheme whle you were in service then amount is not taxable.

3. That is not taxable

4.what 2/3rd value?? That is the corpus based on which you will be receiving your pension till your lifetime. If the pension scheme includes family pension, your dependent will get the family pension till his or her lifetime.