Please define me Commuted Pension & Uncommuted Pension with Examples (Pratical) in detail
I am confused
Thanks
5 Replies
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 04 March 2010
At the time of retirement an employee gets pension.
At the option of the employer this pension can be commuted or uncommuted.
Commuted pansion means pension in lumpsum. Its like you got Rs. 8,000.00 as pension and then on commutation you will receive Rs. 2,50,000.00 in lumpsum. Its one time payment, and therefore after it you will not receive monthly pension or the part of it which is commuted.
Hemchand Kohli
(Accountant)
(889 Points)
Replied 04 March 2010
thanks
but tell be about & Commuted uncommuted pension calculation for Income Tax Purpose
Vikram Kothari
(Sen. Man.&CA Fin.LawTeacher)
(213 Points)
Replied 04 March 2010
Very good explanation Abhishek...
Hemchand which book you are referring for tax ... in that book you will see very good example on above. See the Girish Ahuja or Singhania,....
srmanas
(articled student)
(55 Points)
Replied 04 March 2010
Nitin Grover
(CS)
(1228 Points)
Replied 04 March 2010
dear friends
as u know the meaning of commuted and uncommuted pension
now they have diffrent tax treatment.
firtly if its commuted then is fully exempt for Govt employees but not for Employees other then Govt Employees.
and if its uncommuted then its fully taxable for all's so its will be taxable as a regular salary everybody knowing it
and in case of commuted if Emp other then Govt. employee is also taking Gratuity then 1/3rd will be exempt other wise 1/2 will be exempt
now the main prob is if some is commuted and some is uncommuted then what will be the tax calculation
in this case
suppose Mr. A a pvt employee is getting somw part in commuted and some in uncommuted
then try to give ur explanation as per ur example
--
Sd/-
Nitin Grover
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