Income tax on commutation of pension

Tax queries 1338 views 3 replies

Shyam Bhattaru

Mr.

25 Points Joined January 2012

After retirement as associate professor from a college(salary ,retirement benefits like pension gratuity leave encashment,etc of all permanent teaching and non teaching staff are paid by govt. of WB)

Received approximately Rs 122099/- as commuted value of pension for commutation of pension of Rs 11796/-

After this received a monthly pension of Rs 31265/-.Now I am asked by the treasury officer for pension payment to add the commuted pension with my monthly pension and pay tax for that...(ie Rs 31265+11796 per month)

Now should my total income for I.T payment be the

(i)pension received plus commuted amount ie Rs 43061 X 12 ??

(ii)or only the pension received ie Rs. 31265 X 12 ??

Replies (3)

Sheena Maheshwari

ARTICLESHIP

240 Points Joined July 2011

the uncommuted pension i.e. the monthly pension will remain as it is i.e. 31265*12

as for the commuted pension i.e. 122099 it will be as follows:

122099 minus the exemption

exemption calculated as follows:

if gratuity received : 1/3 * full commuted value of pension

if no gratuity:1/2 *full value of commuted pension

Shyam Bhattaru

Mr.

25 Points Joined January 2012

The gratuity slab not the reference looked after in this case...Should the income amount be of either (i) or (ii)...??

Viswa nath

Sales professional

84 Points Joined July 2018

Sir,

Is 1/3 commutation (receiving gratuity) taxable for LIC Group Super annuation - (contribution paid entirely by employee only) . Resigned from Private firm after 10+ years of contribution to the fund.

LIC has deducted 30% tax on my commutation. (say 1 Lac Tax levied on 3 lacs commuted pension)

Can I show the entire Commutation [3 Lacs] under ITR-2 > EI Sheet > Other Exempt income.. & claim refund.

Kindly reply as due date is nearing. Thanks.