commutation pension

For a government employee, commuted pension is fully exempt.

For a non-government employee, it is partially exempt.

If gratuity is also received with pension – 1/3rd of the amount of pension that would have been received if 100% of the pension was commuted, is exempt from commuted pension and remaining is taxed as salary.

In case, only a pension is received, gratuity is not received – ½ of the amount of pension that would have been received if 100% of the pension was commuted is exempt.