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%)