Taxability of Pension

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Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2011 Pension is included in definition of salary as per the income tax act that means pension would also be taxable on due or receipt basis whichiever is earlier??

pension for month of march is recd on 1/04/2011 would this pension would also be incudible in previous year 10-11 itr of the asssessee??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 July 2011 You can take the due date as the date of receipt. Accordingly, pension received on 01-04-2011 can be taken in the FY 2011-12.
If you follow consistently this method then there will be no difficulty in calculating the yearly pension.

Querist : Anonymous

Querist : Anonymous (Querist)

08 July 2011 Sir thanks a lot but just out of curosity m asking would it be a wrong treatment if taxabiity of pension is also done on due basis like in case of salary?

Considering my problem as the assessee got retd. in jan he got salary till jan so by logic pension for month of feb & march should be taxable in AY 11-12 ITR (On due or recvd basis whichever is earlier) ??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 July 2011 If you see the past practice (which no body is seeing in the case of salaried employees)
adopted by the employee, you will find that return was filed on the basis of salary certificate or Form 16. Whether in salary certificate Salary of March has been included or not ? Please check.

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Now he is not having such certificates. He is having his pension pass book only as a proof of receipt.

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Whatever method you follow, you follow it consistently now onwards.

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