dear experts ,
is pension amount taxable or non taxable?
Uncommuted pension or any periodical payment of pension is fully taxable as salary.
Commuted pension or lump sum received may be exempt in certain cases.For a government employee, commuted pension is fully exempt.For a non-government employee, it is partially exempt.as follows:
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.
And in case only 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.
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