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license pension scheme

praveen (intermediate) (298 Points)

09 August 2019

hello experts my one client is senior citizen and before he took lic pension scheme from which is now evry quarter he recieved fix pension from lic is this taxable or exempt

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2 Replies

rama krishnan (12234 Points)
Replied 10 August 2019

lic pension is taxable

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Tikaram Chaudhary (Founder of Gratuity Trust Fund Consultant) (2187 Points)
Replied 05 March 2021

The New Provisions for Gratuity Benefits as per Social Security Code 2020 will be effective from 01.04.2021.

Analysis for New Provisions for Gratuity Benefits reveals that there will be an exponential rise in Gratuity Liability of employees due to following 3 Provisions:-

1. Change in Definition of Wages (I.e. Wages to be 50% of CTC)

2. NIL vesting condition for Gratuity for Fixed Term Employees.

3. Vesting Condition to be 3 yrs in case of Special Correspondent of News Agency.

There are 2 Options for Companies for Gratuity :-

1. Accounting Option - It is a compulsory option for Companies as it is enforced by the provisions of Section 129 & 133 of Companies Act 2013. In this option companies make provision of gratuity based on an Actuarial Report duly certified by Actuary for compliance of AS 15 Revised 2005/IndAS 19.

2. Funding Option - It is an Discretionary Option for Indian Companies but it is a preferred option due to Annual Tax benefits available under Section 36 (1) (v) of the Income Tax Act 1961. This benefit is not available in option 1 above. In case of any query or requirement visit my website at www.gratuitytrustfund.com