Go AD-Free with CAclubindia Pro and get a FREE CCI Coffee Mug. Subscribe Now!

Pension standard deduction

21 June 2019

Dear Sir

Can a standard deduction of Rs 40,000 be claimed on the annual total pension amount credited to a pensioner? Is this amount correct for FY 18-19?

Regards

Reply
Follow
Share

5 Replies

Rajeshwar Sinha (owner) (95 Points)
Replied 21 June 2019

Yes it can be claimed from pension amount received in FY 2018-19.

Max. amount is 40,000/- i.e. correct.

2 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Om Goyal (445 Points)
Replied 22 June 2019

under income from Head Salary/pension & not other heads pl

Dipesh Jha (PRACTICE ) (673 Points)
Replied 24 June 2019

yes 😊

Suresh Thiyagarajan (Student) (3986 Points)
Replied 24 June 2019

1. According to sec 16(ia) standard deductions to the extent of Rs. 40,000 (FY 2018-19) will be available for Salary income.
2. CBDT has released a clarification on 05.04.2018 regarding the applicability of standard deduction to the person receiving pension income. It read as "Accordingly, any taxpayer who is in receipt of a pension from his former employer shall be entitled to claim a deduction of Rs 40,000/- or the amount of pension, whichever is less, under Section 16 of the Act"
3. Hence standard deduction will be available for pension income.
Note :
Pension income should be taxed under the head Salary. There are pension income which are taxed under IOS. (pension from LIC where no employer-employee relationship exists)
Please correct me if the above solution has an alternative view.

Om Goyal (445 Points)
Replied 25 June 2019

accordingly, i feel , no std dedn. is appl. for EPS from EPFO ,

although, it has indirect Emplr. Emplee relation as Eps is dedtd. from Salary & Deptd with Epfo monthly by Emplr.

After 58 years Age monthly Eps is given to ex emplyee., hence it has a relation as above.

But because Fin/Rev secretary get18 L pension appr from C/State Govts, Hence, they have no int. in public/ pvt sector employee who get eps small pension of 1- 3000 pm only.