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Taxability of pension received by ex-armymen

Soumya (Proprietor) (69 Points)

26 July 2011

I have a query w.r.t Pension received by Ex-Armyman. (Ex Lieutenant of the Indian Army)

1. Is the pension received taxable in the hands of the ex-armyman?

2. Is the payer liable to deduct TDS on the same?

thnx

Soumya

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3 Replies

kamal kishor sen (STUDENT Rajasthan) (2156 Points)
Replied 26 July 2011

Family pension received by the family members of armed forces- fully exempted under section 10 (19)

Pension (received by the employee after retirement but during his life time, in any other cases :-

• Uncommuted Pension is taxable as salary under section 15 in the hands of a Government employee as well as a non-Government employee;

• Any commuted pension received by an employee of the central government, state government, local authority or statutory corporation is wholly exempt from tax under section 10 (10A) (i).

• Payment in commutation of pension received by any other employee (non-Govt):

- in a case where the employee receives gratuity, the commuted value of one-third of the pension which is normally entitled to receive;
- in any other case, the commuted value of one half of such pension.

2. Is the payer liable to deduct TDS on the same?

Income from Pension Annuity is covered by TDS provisions u/s 192.

There is no TDS provision for payment of family pension.

Banks paying pension on behalf of govt. is the person responsible for payment & hence is liable to comply with the TDS provisions & will be penalized in case of default.

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srinivass (CA Final) (2466 Points)
Replied 03 September 2011

thanks a lot friend

Pradeep Kumar (Senior Assistant) (21 Points)
Replied 13 November 2012

Sirs,

I have a doubt. Mr. X. is an ex-army personnel, getting a certain amount... say Rs. 75,000/- as pension per year. He is now working in corporate sector with a net annual emolument of Rs. 4 Lakhs.

Whether he is to be taxed for Rs. 2,20,000/- (deducting Rs. 1,80,000/- from Rs. 4 Lakhs) or Rs. 2,95,000/- (deducting Rs. 1,80,000/- from Rs. 4,75,000/-) ?

It is heard that since Mr. X is retired in 2006 and receiving only part of his full pension (after commutation) (he will be receiving full pension in the year 2021 only), his pension amount is deductable from tax.

Kindly clarify please.

Regards,

PRADEEP