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SC Vasudeva
I am senior citizen (date of birth 12-10-1944). My total pension income was Rs 4,04,087-18 (from 1.4.17 to 31.3.2018). The details are as under:
Total Rs 4,04,387.18
I deposited a tax of Rs 4,604 against Rs 3,89,390 i.e. after deducting Rs 15,000 out of Rs 50,000. Please let me know my tax liability as I was eligible for full rebate of Rs 50,000 sanctioned by PM from the Prime Minister’ relief fund in 8/2017 credited in my account and also mention the section under which I can get full exemption from tax amount this year. — BR Bhadhi
According to my opinion, you are liable to pay tax on the income from pension and allowances. Tax payable thereon works out at Rs 2,509 as the interest income of Rs 3,539 would not be includible in the total taxable income in view of the provisions of Section 80TTA of the Act applicable for assessment year 2018-19. The assistance granted to you out of the Prime Minister’s Relief Fund cannot be treated as an income. The term “Income” as defined in the Income-tax Act, 1961 is of inclusive nature. Items covered under the provisions of Section 2(24) of the Act do not include such type of assistance as part of the income. It has also been held by the apex court that income must be in the nature of a regular receipt from a particular source like fruits grown from a tree. One-time assistance from the Prime Minister’s Relief Fund should not, therefore, be categorised as an “income”. You should revise your tax return so as to claim the refund of excess tax paid by you.
I have retired from a state government undertaking and received Rs 18 lakh as leave encashment after retirement. Despite my plea to treat me under government employee category, my employer deducted TDS on the amount after exempting first Rs 3 lakh. Mine is a pensionable job and our corporation is governed by state government rules and regulations. Now, while filing my income tax return, I want to claim refund of the above TDS deducted by showing leave encashment amount under Exempt Income schedule by quoting Section 10(10AA) for it. I hope there is no offence in my claiming the above refund. Please advise. — A reader
Your employer has rightly categorised you as a non-government employee and, therefore, the amount received by you would be covered within the provisions of Section 10(10AA)(ii) of the Income-tax Act 1961 (The Act). You may not
be able to claim the refund of tax deducted by the government undertaking as an employee retiring from any government undertaking is not treated as a government employee.
Please refer to the Central Government advisory for family pension standard deduction of Rs 40,000 in The Tribune dated July 21, 2018. However, in one of your previous replies, you have informed that family pensioner is not entitled to standard deduction of Rs 40,000. Are the rules changed by government or it has been mistakenly given by the government? — Gulshan Kumar
Deduction of Rs 40,000 has been provided under Section 16 of the Act which deals with the income under the head salaries. Therefore, any person receiving pension from his former employer would be taxable under the head “Income from Salary” and deduction of Rs 40,000 would be allowable therefrom. In case the income is not taxable under the head “Salary”, no such deduction is allowable.
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