Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity

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EPFO pension is generally eligible for the standard deduction as pension income. Private annuities are usually not. However, if the annuity is reported as salary in Form 16, AIS, and Form 26AS, verify the tax treatment before claiming the deduction in the ITR.

KRISHNA

KRISHNA (Querist)

27 June 2026 Sir/ Experts,

I draw EPFO (Employee Provident Fund) Pension and get ICICI Prudential Life Annuity.
Is this amount eligible for deduction under Standard Deduction for FY 2025-2026 (AY 2026-2027) in the new Tax Regime ?
Appreciate response.

Best Regards, Krishna

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

27 June 2026 * ✅ EPFO (EPS) pension: Eligible for standard deduction (if taxed as salary/pension).
* ❌ ICICI Prudential life annuity: Not eligible for standard deduction.
* ✅ Under the new tax regime for AY 2026-27, the standard deduction is available only against salary/pension income and not against income from other sources.

KRISHNA

KRISHNA (Querist)

27 June 2026 Dear Sir, Thanks for the quick response.
The Annuity I have received from ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED, is shown as
"Salary as per provisions contained in section 17(1)" and also under "Less: Deductions under section 16" & "Standard deduction under section 16(ia)" in FORM No. 16 they have sent me for AY2026-27 in June 2026.
I am confused.. hence the question. Kindly clarify.

KRISHNA

KRISHNA (Querist)

27 June 2026 Also kindly note, in Form 16 they have sent, "Whether opting out of taxation u/s 115BAC(1A)?" is No

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

28 June 2026 Standard Deduction is only for "Salary" income.
EPF Pension is usually eligible as "Salary," but private insurance annuities are typically "Income from Other Sources" and not eligible for the Standard Deduction.
Receiving a Form 16 from an insurance company is atypical; verify how the income is reported in your AIS/Form 26AS and consult a professional before filing your return.

KRISHNA

KRISHNA (Querist)

28 June 2026 Dear Sir,
Verified that my AIS & Form 26AS report the income as Salary.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 July 2026 Yes, the income you receive as pension is taxable in India. For income tax calculation, pension is considered similar to your salary income and is taxed basis the regular income tax slab.
Refer::: https://www.iciciprulife.com/retirement-pension-plans/is-pension-taxable.html

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