Hi
I received 1/3 commutation of my superannuation from HDFC LIfe and balance converted to monthly annuity.
Would like to know under which section can i claim exemption for the commuted amount. Do i add under taxable income - commutation and exemption under Sec 10 ( 10 A) OR included the commuted value under exempt income - Sec 10 ( 10D)?
Thanks
PS
The commuted portion of a superannuation fund (such as the 1/3 amount received as a lump sum on retirement from HDFC Life) is exempt from tax under Section 10(10A) of the Income Tax Act, 1961—not Section 10(10D).
Section 10(10A) specifically covers exemption for the commuted value of pension from recognized superannuation funds or pension schemes (including those run by life insurers like HDFC Life), subject to specific limits: for private-sector employees, one-third of the commuted value is exempt if gratuity is received, and one-half is exempt otherwise. The remainder, if any, is taxable as salary or income from other sources.
The commuted (lump sum) pension should be included in taxable income under “Salaries” (for ex-employees) or “Other Sources” (for non-employees) and exemption claimed under Section 10(10A).
Show the taxable and the exempt (Section 10(10A)) portions clearly in the respective heads in the ITR.
Do not add the commuted value under “exempt income – Section 10(10D)” as this is incorrect for superannuation commutation.
VIKAS VERMA & CO
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