Pensioners Can Also Claim A Standard Deduction Of Rs 40,000; Read To Know
April 8th, 2018 / 2:30 PM
Till last year, a salaried individual was exempted from paying tax on amounts up to Rs 15,000 of medical expenditure and Rs 19,200 of transport allowance. Now, these have been subsumed under Rs 40,000 standard deduction. The issue of discussion was whether the individuals getting pensions from their ex-employers can also avail this deduction or not. After receiving representations on the matter, CBDT stated on Thursday in favour of the pensioners.
IT department tweeted, that a taxpayer who receives a pension from his former employer shall be entitled to claim a deduction of upto Rs 40,000/-
It is clarified that a taxpayer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs 40,000/- or the amount of pension, whichever is less, under Section 16 of the Act.
— Income Tax India (@IncomeTaxIndia) April 5, 2018
CBDT elaborated further, “The pension received by a taxpayer from his former employer is taxable under the head ‘salaries’. Accordingly, any taxpayer who receives a pension from his former employer shall be entitled to claim a deduction of Rs 40,000 or the amount of pension, whichever is less, under Section 16 of the (I-T) Act.” as reported by The Times of India
Also published on Medium.
Written by : Abhinav Joshi
Edited by : Bharat Nayak