Direct Tax Law 2010 (Solved)


Commuted pension 10 (10) (A)
Uncommuted pension means the pension which is received by the employee periodically and which is chargeable to tax u/s 15 in the hand of both Government and Non Government employee. Commuted pension refers to taking lump sum amount by commuting the whole or part of the pension. Where an employee had commuted his pension then the remaining portion will be received periodically. Any commuted pension received by the government employee is wholly exempted from tax. Judges of High court and Supreme Court also entitled for this exemption. In case of Non government employees following shall be exempt from tax
If the employee is in receipts of Gratuity: 1/3 of commuted pension which we would have received had he commuted the whole pension (100%)
If the employee is in not receipts of Gratuity:  1/2 of commuted pension which we would have received had he commuted the whole pension (100%)

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