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trnghosh (sr asst)     22 September 2021

Income Tax on Arrear Commutation Amount

I got some arrear commutation amount after retirement as my basic has been revised due to Bipartite settlement. So far my knowledge I know that commutation amount is non taxable but to my surprise my pension paying authority ( SBI) deduct tax on arrear commutation amount. Is that Ok? 

Shall be glad if anyone give some idea on this. 

Many thanks for your time. 

T K Ghosh 



 4 Replies

Dhirajlal Rambhia

Dhirajlal Rambhia (SEO Sai Gr. Hosp.)     23 September 2021

Seems to be salary arrears, as commutation pension amount is generally paid in single slot,

trnghosh

trnghosh (sr asst)     23 September 2021

It is not salary arrears, when I retire at that time some negotiation talks going on in between bank and IBA which is materialized later after my retirement. As a result my basic changed and the commutation amount which I got previous increased and I get salary arrear and commutation arrear as well. My question is about the second one commutation arrear and for that I asked here. Surprisingly the details of the credit also shows " XI Bipartite Commutation arrear".

Dhirajlal Rambhia

Dhirajlal Rambhia (SEO Sai Gr. Hosp.)     23 September 2021

This commutation amount would be taxable under head IFOS, and not tax-free.

CA. Umesh kumar

CA. Umesh kumar (ca.umesh11@gmail.com)     26 September 2021

You can claim relief under section 89 for tax deducted on arrear salary by filing form 10E


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