Standard Deduction Applicable for Pensioners -
Clarification
Ministry of Finance
Clarification regarding applicability of standard deduction to
pension received from the former employer
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.
Source: PIB
No comments:
Post a Comment