LIC/any other approved fund may pay pension to an individual from the funds contributed by the employer. Commuted pension received from such fund is exempt whereas uncommuted pension from such fund is taxable under the head 'Income from Salaries'.
@ rashi Gandhi. un computed pension is taxable . Read the whole section..
Clause (23AAB) of Section 10 exempts from income-tax the income of the fund set up by LIC or any other insurer under a pension scheme. It does not apply to the income of the pensioner who receives the pension from such funds. Thus, the un-commuted pension received from LIC’s pension fund is not covered by Section 10 (23AAB) and the same is taxable in the hands of the recipient.