Commuted pension recieved from usa
This query is : Open
16 August 2018
Sub: Taxability of USA Lump sum Pension received in India (As Ordinary resident of India).
Facts:
· Received Lump sum Pension (No Gratuity) from USA ($44,190 = INR 28,33,153) on 03/11/2017. USA did not impose any tax on the lump sum.
· Was working in USA for Private companies since Aug 2003 – Feb 2015.
· Came back from USA to India in Feb 2015. Currently I am resident of India (996 days as on Nov 03 2017). I am not a Citizen of USA or a Green card holder. Present age = 41Yrs.
Tax interpretation on Lump sum Pension income.
· As I am Indian citizen, Indian Pension laws are applicable for paying taxes on Global income.
· Per Indian tax laws, for Non Govt. Employee, the computation of commutation value of pension is as follows:
· Basic pension per US pension plan = $814 per month for rest of life (After Oct 1 2042..retirement age 65)
· Date of Birth – Sep 25, 1977
· Date of VRS – 11 March, 2015. Pension received on 03/11/2017.
· Commutation factor: 9.145 (35 Years) per Commutation table.
· Hence given above: Commutation value of pension, if 100 % pension is commuted is $814 * 100% *12 months*9.145 =$89,328 (INR = 58 Lakhs.)
· Per Indian Tax laws 50% of Commutation value of pension is exempt. Which is equal to 29 Lakhs Rs
· As I have received 28.3 Lakhs only, hence Entire Amt. is Exempt from Tax.
Please advice if my above logic is correct.. Thx much for help!
Facts:
· Received Lump sum Pension (No Gratuity) from USA ($44,190 = INR 28,33,153) on 03/11/2017. USA did not impose any tax on the lump sum.
· Was working in USA for Private companies since Aug 2003 – Feb 2015.
· Came back from USA to India in Feb 2015. Currently I am resident of India (996 days as on Nov 03 2017). I am not a Citizen of USA or a Green card holder. Present age = 41Yrs.
Tax interpretation on Lump sum Pension income.
· As I am Indian citizen, Indian Pension laws are applicable for paying taxes on Global income.
· Per Indian tax laws, for Non Govt. Employee, the computation of commutation value of pension is as follows:
· Basic pension per US pension plan = $814 per month for rest of life (After Oct 1 2042..retirement age 65)
· Date of Birth – Sep 25, 1977
· Date of VRS – 11 March, 2015. Pension received on 03/11/2017.
· Commutation factor: 9.145 (35 Years) per Commutation table.
· Hence given above: Commutation value of pension, if 100 % pension is commuted is $814 * 100% *12 months*9.145 =$89,328 (INR = 58 Lakhs.)
· Per Indian Tax laws 50% of Commutation value of pension is exempt. Which is equal to 29 Lakhs Rs
· As I have received 28.3 Lakhs only, hence Entire Amt. is Exempt from Tax.
Please advice if my above logic is correct.. Thx much for help!
18 August 2018
In case of 100% commutation 50% of money received is exempt.
18 August 2018
Thank you Sir for your help! Much appreciated. Sir, this pension is received in India, when I was working in USA for a foreign Private company. I am still eligible for the exemption in India correct! Thx Much
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