Tax on Pension from EPFO

For Self: It counts as Income from Salary, and you are eligible for the standard deduction of ₹50,000.

For Family Members (Legal Heir): It counts as Income from Other Sources, and you are eligible for a maximum family pension deduction of ₹15,000.

Thanks for your response but shouldn't standard deduction be ₹ 75,000 ? Also what should Name of the Employer, Nature of Employer etc. ?

TAX ON EPFO PENSION - TWO COMPONENTS, DIFFERENT TAX TREATMENT

EPFO provides two separate benefits: EPF (Employees Provident Fund) and EPS (Employees Pension Scheme). Their tax treatment is completely different.

EPF WITHDRAWAL (the lump sum corpus):

• Tax-free if the employee has completed 5 continuous years of service
• Taxable if withdrawn before 5 years (with TDS deducted)

EPS PENSION (the monthly pension you receive after retirement):

• FULLY TAXABLE as salary income under Section 17(1)(ii)
• Even though it comes from EPFO, it is treated as pension from a former employer and taxed as salary
• TDS is deducted by EPFO on this monthly pension if it crosses the threshold

DEDUCTIONS AVAILABLE ON EPS PENSION: Under the old tax regime:

• Standard deduction of Rs 75,000 (for AY 2026-27) on pension income
• Plus any Section 80C, 80D, etc. deductions

Under the new tax regime (Section 115BAC):

• Standard deduction of Rs 75,000 applies to pension income
• But Section 80C, 80D and most other deductions are not available

IMPORTANT: The standard deduction of Rs 75,000 was enhanced from Rs 50,000 from AY 2026-27 onwards and applies to all pensioners, including those receiving EPS from EPFO.

For a complete guide to pension taxation (commuted, uncommuted, family pension, EPFO) with computation examples: [income tax on pension in India AY 2026-27](https://taxgarden.in/blog/income-tax-on-pension-india-ay-2026-27-commuted-uncommuted-family)

Thanks. what should be the name of the employer , nature of the employer mentioned as, if tehre is NO TDS

Thanks. what should be the name of the employer , nature of the employer mentioned as, if tehre is NO TDS

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