Income tax on epf pension

commuted pension means the lumpsum amount received and uncommuted means which is received in instalments 
Following is exempted from Commuted pension:

a) Govt employee - Fully exempted

b) Non governmental employees: 1/3 of the total pension.(If he also receives gratuity) or 2/3 of total pension(If he doesnt receive any gratuity)

Uncommuted pension is always taxable. 
 

Thank you sir.Under which head will the uncommuted EPF pension be taxed?

for Retiree its SALARY income; but for family member (after demise of the employee), its under  'Income From Other sources'

thank you sir.I tend to disagree with the head you mentioned i.e salary because the pension is paid by Provident fund dept. There is no employer-employee relationship.I therefore feel that for the retired  employee  it has to be taxed under "Income from other sources" as is similar to the  income of pension from LIC annuity schemes.I would be grateful for your comments.

Pension is described in section 60 of the CPC and section 11 of the Pension Act as a periodical allowance or stipend granted on account of past service, particular merits etc.

There are three important features of ‘pension’.

Firstly, pension is a compensation for past service.

Secondly, it owes its origin to a past employeremployee or master-servant relationship.

Thirdly, it is paid on the basis of earlier relationship of an agreement of service as opposed to an agreement for service. This relationship terminates only on the death of the concerned employee.

Pension received from a former employer is taxable as ‘Salary’. Hence, the various deductions available on salary income, including relief u/s 89(1) for the arrears of pension received would be granted to pensioners who received their pension from, a nationalised bank and in other cases their present Drawing & Disbursing Officers. Similarly, deductions from the amount of pension of standard deduction and adjustment of tax rebate u/s 88 and 88B shall be done by the concerned bank, at the time of deduction of tax at source from the pension, on furnishing of relevant details by the pensioner. Instructions in above regard were issued by R.B.I.’s Pension Circular (Central Service No. 7/C D.R./ 1992(Ref. No. DGBA:GA(NBS) No. 60/GA64-(II CVL-91-92 dated 27.4.92).

Hello Sir,

May I know what is tax treatment of pension income from PPF.

Completely exempted......

Thank your sir, Appreciate your help.

I have received both gratuity and lumpsum pension amount after exiting my previous company. The form16 given by my company does not include the gratuity/pension amount. I need to show the commuted value (66.66%) and the tax exempt value(33.33%) of the pension amount in ITR2 form. Where do I show them in my ITR2 form?

I have received both gratuity and lumpsum pension amount after exiting my previous company. The form16 given by my company does not include the gratuity/pension amount. I need to show the commuted value (66.66%) and the tax exempt value(33.33%) of the pension amount in ITR2 form. Where do I show them in my ITR2 form?

Add taxable part in your salary amount; while exempted part under exempted income.

Thanks Dhirajlal.

I am actually confused with adding taxable pension amount to Salary amount under Schedule S.

Should I add this taxable amount to the existing amount of my previous employer under (Salary (Excluding all exempt/ non-exempt  allowances, perquisites & profit in lieu of salary)) OR should I click 'Add Salaries' and make an entry for this pension amount (In this case should who would be the eomployer - Previous company OR SBI who credited the amount OR EPFO). Please advise.

It is related to your previous employment, hence SBI doesn't come into picture.

Thanks you so much. I will go ahead and add this to my previous employer's salary. I hope I dont have to update the new value for previous employer under TDS sheet as it is anyway not reflecting in Form16.