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Taxability of commuted pension

Murali Rotti Sathyanarayana (Manager of Accounts) (165 Points)

24 July 2018

Please suggest whether the commutation pension after retirement received by BSNL employee is taxable or exempt.

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rama krishnan (12244 Points)
Replied 24 July 2018

Commuted income received by the government employee is non-taxable. (Fully exempt)

Non-government employees, who receive Gratuity along with Commuted Pension, get a tax exemption of up to 1/3rd of the total amount

Non-government employees who do not receive Gratuity, the taxable exemption amount from is 1/2 of the total commuted pension received.

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Viswa nath (Sales professional) (70 Points)
Replied 31 December 2020

Sir,

Is 1/3 commutation (receiving gratuity) taxable for LIC Group Super annuation - (contribution paid entirely by employee only) . Resigned from Private firm after 10+ years of contribution to the fund.

LIC has deducted 30% tax on my commutation. (say 1 Lac Tax levied on 3 lacs commuted pension)

Can I show the entire Commutation [3 Lacs] under ITR-2 > EI Sheet > Other Exempt income.. & claim refund.

Kindly reply as due date is nearing. Thanks.