- +91 9911235662Team Member
- Karol Bagh, New DelhiCorporate Office Location
- 09:30AM - 06:00PMOffice Timing
Standard deduction available on pension from former employer: CBDT
Ministry of Finance
Clarification regarding applicability of standard deduction to pension received from the former employer
Posted On: 05 APR 2018 1:55PM by PIB Delhi
The Central Board of Direct Taxes (CBDT) has clarified that the pension received by a taxpayer from his former employer is taxable under the head “Salaries”. The Finance Act, 2018 has amended Section 16 of the Income–tax Act, 1961 (“the Act”) to provide that a taxpayer having income chargeable under the head “Salaries” shall be allowed a deduction of Rs 40,000/- or the amount of salary, whichever is less, for computing his taxable income. Accordingly, any 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.
Earlier, the representations were received seeking clarification as to whether a taxpayer, who receives pension from his former employer, shall also be eligible to claim this deduction.
Team Edu-Visor