You are here
Pension is the amount received after retirement by employee.
Normally,it is received monthly or quarterly.
However,sometimes,employee says that he doesnot want monthly pension .He instead asks for lumpsome payment.
This lumpsome payment is called Commuted pension
Also,sometimes,employee commutes only part of his pension.Hence he receives both
- Lumpsome Payment (called Commuted Pension)
- Monthly Pension (called Uncommuted Pension)
Hence we can say,pension is of 2 types
- Commuted Pension
- Uncommuted Pension
Taxability
| Uncommuted Pension | Commuted Pension |
| It refers to pension received periodically.(Monthly ,Quarterly or Annually) | It means lump sum amounttaken by commuting the whole or partof the pension. |
| Taxability | Taxability |
For All types of EmployeesIt is fully TAXABLE for all |
It is exempt as follows For Central Government /State Government Employees or Member of Defence Forces Fully Exempt For Other Employees There can be 2 cases 1.If Employee gets Gratuity Also 1/3 of Amount Received if he had commuted whole of pension 2.If Employee Does not get Gratuity 1/2 of Amount Received if he had commuted whole of pension |
