How pension of a government employee has to be calculated
uncommuted 39740
commuted 1457847 (40%)
gratuity 10,00,000
1. Any gratuity received by an employee of the Central Government, State Government or local authority, on death or retirement is fully exempt from tax.
2. For a government employee, commuted pension is fully exempt.
3. Uncommuted pension is fully taxable as salary. So, in above case Rs. 39,740/- is taxable.
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