Income from pension

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 March 2012 Hi,
Plz let me know where to show the income pension while calculating the Total income of an individual.
Are there any exemption on the same?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 March 2012 i) Pension of retired employee's is to be declared under the head 'income from salary'. No expenses are allowed against this type of pension.
ii) Family pension is to be declared under the head 'income from other sources' against which 33 1/3% of such income subject to a ceiling limit of Rs.15,000/- is allowed as a deduction.

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
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07 March 2012 Pension is covered in the definition of salary under section 17(1)

14.2.9 Uncommuted/Commuted pension : Uncommuted pension is fully taxable. Therefore, the employees should get their pension commuted. Commuted pension is fully exempt from tax in the case of government employees and partly exempt from tax in the case of nongovernment
employees. In the case of the latter, the employees can take advantage of relief
under section 89(1).

Family Pension is taxable under the head income from other sources.
(iv) In the case of income in the nature of family pension, a deduction of a sum equal to 33&1/3 per cent of such income or Rs.15,000, whichever is less, is allowable. For the purposes of this deduction “family pension” means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death.

4.23 RELIEF UNDER SECTION 89
(2) Similar tax relief is extended to assessees who receive arrears of family pension as defined in the Explanation to clause (iia) of section 57. For the purpose of clause (iia) of section 57, “family pension” means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death.

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