Income tax: Can I claim standard deduction on pension received by me?

 









An employee is entitled to claim standard deduction, upto a maximum amount of Rs. 50,000/- in a financial year, against any income which is taxable under the head “Salaries". The standard deduction is available against salary received whether in arrears or in advance or for current period. In addition to salary received from present and past employer even pension received from ex-employer also becomes taxable under the head Salaries. So a retired person is entitled to claim standard deduction against the pension income from past employers.

For the pension which accrue to a person by virtue of his employment becomes taxable under the head “Salaries" and entitles the recipient to claim standard deduction. It can be a pension from ex-employer or pension from Employee Provident Fund Office (EPFO) office as well as an annuity from an insurance company, in respect of annuity bought by the employer for superannuation. Please note that any periodic payment received as pension, on an annuity purchased by you directly from an insurance company becomes taxable under the head “Income from Other sources" and therefore not eligible for standard deduction. The annuity earned by your wife is taxable under the head “Income from other sources" so your wife is not entitled the standard deduction.

Source:https://www.livemint.com/money/ask-mint-money/income-tax-can-i-claim-standard-deduction-on-pension-received-by-me-11634360455316.html

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