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Discussion > Income Tax > Tax queries >

What is commuted and uncommuted pension?

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student


[ Scorecard : 46]
Posted On 22 November 2011 at 13:57 Report Abuse

Can anyone please explain, what is commuted and uncommuted pension?. How it is to be treated while calculating tax liability for AY 2011-12 Thankyou

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amit jain
Chartered Accountant


[ Scorecard : 532]
Posted On 22 November 2011 at 14:16

commuted pension means the lumpsum amount received and uncommuted means which is received in instalments



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Sailza
STUDENT


[ Scorecard : 33]
Posted On 22 November 2011 at 14:26

Following is exempted from Commuted pension:

1/3 of the total pension.(If he also receives gratuity) or 2/3 of total pension(If he doesnt receive any gratuity)

Uncommuted pension is always taxable.



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Member (Account Deleted)
student


[ Scorecard : 46]
Posted On 22 November 2011 at 14:32

Thankyou Sir, Why is it related to gratuity?, Calculation of taxable pension differs, if gratuity received, and it will be different if gratuity not received.. Please clarify, Amit Sir..



Z
╭∩╮(︶-︶)╭∩╮


[ Scorecard : 984]
Posted On 22 November 2011 at 14:46

It is related to gratuity because for calculating the exemption for Pension u/s 10(10A) , if the assesse who has received gratuity also then his exemption limit is

Commuted amount / % of commutation x 100 x1/3

 

Otherwise

Commuted amount / % of commutation x 100 x1/2

 

Those who receive gratuity also, receive less exemption on pension



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Member (Account Deleted)
student


[ Scorecard : 46]
Posted On 22 November 2011 at 14:55

Thanks Amit sir, Saliza, Z, for clearing my doubt, Thanks CCI



Tripti ( CA, MBA, CPA)
no


[ Scorecard : 132]
Posted On 23 November 2011 at 10:53

Uncommuted pension -  Fully taxable

Commuted pension -

  a) Govt employee - Fully exempted

  b) Non - Govt employee ( received gratuity also ) - 1/3 of Full value of pension

  c) Non - Govt employee ( not received gratuity ) -    1/2 of Full value of pension



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kiran
CA FINAL


[ Scorecard : 80]
Posted On 23 November 2011 at 11:31

COMMUTED PENSION :   CERTAIN % OF  PENSION TO BE RECEIVED IN FUTURE IS COMMUTED

BY   THE  RETIRED ONE. WHAT EVER THE AMOUNT COMMUTED RECEIVED IN LUMSUM IS

EXEMPTED IN THE HANDS OF GOVT EMPLOYEES.

IN CASE OF PRIVATE EMPLOYEES 1/3 OR 1/2 OF PENSION WHICH HE IS ENTITLED TO

RECEIVE IS EXEMPTED.

EG. PRIVATE EMPLOYEE COMMUTED 25% & COMMUTED PENSION IS  rS. 50000. THE 1/3 OR 1/2

OF (50000/25%)  IS EXEMPTED.

UN COMMUTED PENSION:  WHICH MEANS REGULAR AMOUNT OF PENSION RECEIVED BY

RETIRED ONE EVERY MONTH  WHIS IS TAXBLE AS SALARY .

 

KIRAN KUMAR TULVA



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