Is Commuted Value of Pension Tax Free?
February 23, 2009 by taxworry · Leave a Comment
Whether the amount received as commutation of pension is taxable or not , Sardindu Basu, Kolkata
1. FULL exemption of commuted value of pension received by person getting commutation of pension under Civil Pension (Commutation) Rules or similar rule. This is generally applicable in case of Central Government employee or State Government employee or a local authority or a corporation established under Cetral or State or Provincial
2. In case of pension received from any other employer under any other scheme , maximum exempt is 33% of the if the employee also receives gratuity .
3. In any other case i.e employee not getting gratuity , 50 % but the commuted value is determined having regard to age ,health ,rate of interest and officially recognised mortality rate.
4. Full amount of commuted value of pension given by a Fund set up by LIC under a pension scheme as per Clause 23AA B
It should also be noted that pension received from United Nation is also exempt from tax.
If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site (Ctrl+C to copy)
It will look like this: Is Commuted Value of Pension Tax Free?