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
Seems to be salary arrears, as commutation pension amount is generally paid in single slot,
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".
This commutation amount would be taxable under head IFOS, and not tax-free.
You can claim relief under section 89 for tax deducted on arrear salary by filing form 10E
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