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commutation pension

Lamiya Km (28 Points)

06 August 2019

whether the commuted pension received after retirement is taxable or not?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183802 Points)
Replied 06 August 2019

For a government employee, commuted pension is fully exempt.

For a non-government employee, it is partially exempt.

If gratuity is also received with pension – 1/3rd of the amount of pension that would have been received if 100% of the pension was commuted, is exempt from commuted pension and remaining is taxed as salary.

In case, only a pension is received, gratuity is not received – ½ of the amount of pension that would have been received if 100% of the pension was commuted is exempt.