Treatment of Pension ?annuity returns on PMVY

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This query is : Resolved

Quick Summary

PMVVY periodic payouts are generally treated as taxable income from Other Sources, not salary or pension eligible for standard deduction. They are taxed at slab rates and reported with other interest income. Non deduction of TDS does not remove the tax liability.

rmalhotra

rmalhotra (Querist)
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28 June 2026 Sir,
Certain items looks simple but difficult to find direct answer in Income Tax Act. like PMVY (PM VayaVandanYojna ). Following Queries:-
1. Fixed Periodical Returns of PMVY is to be termed as Annuity OR Interest. OR Pension
2. Is it fully taxable as per slab rate.
3. If Pension then can it be classified under Salaries with standard deduction OR under "Income from Other sources "
4.Is it to be clubbed with Interest income of deposits under head of " Income from Other Sources " as there is scope to add on fields in ITRs form2 for AY2026-27
5.Why no TDS is deducted even if amount exceeds Rs50000 p.a. and no relevant form of (no-Deduction) is submitted

Please guide pointwise.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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28 June 2026 Nature of Income: Interest (not Salary).
Tax Head: Income from Other Sources.
Taxability: Fully taxable at your slab rate.
TDS: Even if no TDS is deducted, you are responsible for reporting the income and paying the tax manually.
Deduction: Not eligible for standard deduction (as it is not Salary).

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rmalhotra

rmalhotra (Querist)
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28 June 2026 Hi Sir! Thank you for quick guide. Have good times ahead .

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