I superannuated from a Public Sector Firm. After my retirement my employer deposited some cash with LIC (Life Insurance coverage Company) for annuity beneath superannuation scheme. LIC is paying me ₹9,299/- p.m. as pension for that annuity. I wish to know as to beneath which head of revenue, the pension acquired from LIC, is to be supplied for tax? Whether it is to be taxed beneath the pinnacle Salaries, am I entitled to assert commonplace deduction of fifty,000/- in opposition to this? My spouse has additionally deposited some cash beneath Pradhan Mantri Vay Vandna Yojna (PMVVY) of Life Insurance coverage Company of India. Please affirm whether or not she will be able to additionally declare commonplace deduction of ₹50,000/-.
An worker is entitled to assert commonplace deduction, upto a most quantity of Rs. 50,000/- in a monetary 12 months, in opposition to any revenue which is taxable beneath the pinnacle “Salaries”. The usual deduction is obtainable in opposition to wage acquired whether or not in arrears or prematurely or for present interval. Along with wage acquired from current and previous employer even pension acquired from ex-employer additionally turns into taxable beneath the pinnacle Salaries. So a retired individual is entitled to assert commonplace deduction in opposition to the pension revenue from previous employers.
For the pension which accrue to an individual by advantage of his employment turns into taxable beneath the pinnacle “Salaries” and entitles the recipient to assert commonplace deduction. It may be a pension from ex-employer or pension from Worker Provident Fund Workplace (EPFO) workplace in addition to an annuity from an insurance coverage firm, in respect of annuity purchased by the employer for superannuation. Please observe that any periodic fee acquired as pension, on an annuity bought by you immediately from an insurance coverage firm turns into taxable beneath the pinnacle “Earnings from Different sources” and due to this fact not eligible for traditional deduction. The annuity earned by your spouse is taxable beneath the pinnacle “Earnings from different sources” so your spouse isn’t entitled the usual deduction.
Balwant Jain is a tax and funding skilled and will be reached on jainbalwant@gmail.com and @jainbalwant on Twitter
Supply: Live Mint