Income tax: Can I declare customary deduction on pension obtained by me?

I superannuated from a Public Sector Company. After my retirement my employer deposited some cash with LIC (Life Insurance Corporation) for annuity beneath superannuation scheme. LIC is paying me ₹9,299/- p.m. as pension for that annuity. I need to know as to beneath which head of revenue, the pension obtained from LIC, is to be supplied for tax?  If it’s to be taxed beneath the top Salaries, am I entitled to say customary deduction of fifty,000/- towards this?  My spouse has additionally deposited some cash beneath Pradhan Mantri Vay Vandna Yojna (PMVVY) of Life Insurance Corporation of India. Please verify whether or not she will be able to additionally declare customary deduction of ₹50,000/-. 

An worker is entitled to say customary deduction, upto a most quantity of Rs. 50,000/- in a monetary 12 months, towards any revenue which is taxable beneath the top “Salaries”. The customary deduction is obtainable towards wage obtained whether or not in arrears or upfront or for present interval. In addition to wage obtained from current and previous employer even pension obtained from ex-employer additionally turns into taxable beneath the top Salaries. So a retired particular person is entitled to say customary deduction towards the pension revenue from previous employers.

For the pension which accrue to an individual by advantage of his employment turns into taxable beneath the top “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 due to this fact not eligible for normal deduction. The annuity earned by your spouse is taxable beneath the top “Income 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

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