HELLO FRIENDS, PLS. TELL ME IF THE PENSION IS RECEIVED BY THE SENIOR CITIZEN P.M WHETHER TDS IS DEDUCTED ON THAT AMOUNT IF THAT EXCEEDS THE TOTAL EXEMPTED LIMIT.
Pankaj Arora
(Learner)
(3134 Points)
Replied 29 March 2011
TDS on payment of pension through Nationalised Banks :
It has been clarified by CBDT vide circular No. 771 dt. 3/11/98 that in the case of pensioners receiving pension through nationalised banks, provisions of TDS are applicable in the same manner as they apply to the salary income.
From the income being paid as pension the banks are required to deduct specified amount of standard deduction u/s 16. Similarly they are required to allow deductions under chapter VIA, tax rebate u/s 88, 88B (in respect of senior citizens) & 88C. (Under the income tax act any person who has attained the age 65 years or more during the previous year is treated as senior citizen and a rebate of Rs. 15,000/- or the entire tax payable whichever is less, is allowable u/s 88B.)
The rebate u/s 88 is allowable to the pensioner on furnishing of relevant details by him to the bank. Similarly relief u/s 89(1) for the arrear of pension received is also to be granted by the banks, instructions in this regard have been issued by Reserve Bank of India vide R.B.I.'s pension circular (Central Series) No. 7/CDR/1992 (Ref No. PGBA. GA: (NBS) No 60/GAG4 (11CVD-91/92) DT. 27/4/92.
VIKAS SHARMA
(ARTICLESHIP(IPCC))
(55 Points)
Replied 29 March 2011
NO TDS DEDUCTION REQUIRE ,,,,,,,THERE IS NO SECTION FOR THIS SITUATION,,,,ACTUALLY I M WORKING IN C.A FIRM ,,,, AND I HANDLE THE SAME SITUATION,,,,,,, THEREFORE I CAN SUERLY SAY THAT NO TDS DEDUCTION IS REQUIRE....
RAJ KUMAR
(FINANCE MANAGER)
(1393 Points)
Replied 29 March 2011
SO WE HAVE TO PAY THE TAX WHILE FILING THE RETURN.
Pankaj Arora
(Learner)
(3134 Points)
Replied 30 March 2011
TDS ON PENSION AND
RETIREMENT BENEFITS
5.1 What is Pension? Pension is described in Section 60 of
the CPC and Section 11 of the Pension Act as a periodical
allowance or stipend granted on account of past service,
particular merits, etc. It involves three essential features. Firstly,
pension is a compensation for the past service, secondly, it owes
its relationship to a past employer-employee relationship or
master servant relationship. Lastly, it is paid on the basis of
earlier relationship of agreement of service as opposed to an
agreement for service.
Pension received from a former employer is taxable as
salary. As such the relevant provisions of TDS as specified in
Section 192 and other relevant provisions are also applicable to
pension income and tax is deductible on the same as it is in the
case of payment of salary.
5.1.2 TDS on payment of pension through
Nationalised Banks: It has been clarified by CBDT vide
circular NO. 761 dt. 13/01/98 that in the case of pensioners
receiving pension through nationalized banks, provisions of TDS
are applicable in the same manner as they apply to the salary
income.
From the income being paid as pension the banks are
required to allow deductions under chapter VIA.
Similarly relief u/s 89 for the arrears of pension received is
also to be granted by the banks. Instructions in this regard have
been issued by Reserve Bank of India vide R.B.I’S pension
Mathihalli Gururaja Rao
(Jt DGFT (rtd))
(26 Points)
Replied 10 July 2011
Informative exchange of mails. I am a pension from Central Govt. Now, I could collect form16 from the bank, every year and file my IT return to claim the refund or accountmy other income from interest on FD etc. Because, the Banks are busy. Their pension work/brnach in a diffrent place. Most of the youngsters in the Banks, donot answer the pensioners. Ofcourse pensioners also not satisfied with the latest TDS system etc. so allow them to deduct,, not visit and disturb the bank staff, collect form16 every year and file the return. One good thing is, theyhave taken the exemption limit for senior citizens before they deduct..
System are to be upgraded in the countrys interest.
C.A SHASHANK GOYAL
(Chartered Accountant)
(362 Points)
Replied 10 July 2011
You need to deduct TDS as pension duly falls under the head salary if it exceeds maximum amount not chargeable to tax and salary provisions relating to TDS Is governed by section 192 and also as per section 15 chargeability of salary retirement benefits are covered and pension is one of the retirement benefit .
Mathihalli Gururaja Rao
(Jt DGFT (rtd))
(26 Points)
Replied 10 July 2011
On 29th June 2011, the bank started deductung TDS from my pension.
Sure, they have taken the exemption limit of a Senior Citizen(68) before
deducting. Want to know: 1. April 2012, collecting the form16 from the bank.
2.Filing the return showing the other income, Interest on FDs, 3. giving the list of savings upto one lakh 4. Medical insurance etc etc..... 5. No need to worry about the advance tax since TDS is done by bankers from my pension, every month....( no idea, the the min amount allowing the paymnet of advance tax). 6. Any excess TDS by bank, I can claim refund...
Please reply, when you find time. ThanQ.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
CAclubindia
