Applicability of standard deduction to pension received from former employer – CBDT Clarification

Applicability of standard deduction to pension received from former employer – CBDT Clarification

Applicability of standard deduction to pension received from former employer – CBDT Clarification
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 5th April, 2018
PRESS RELEASE 

Clarification regarding applicability of standard deduction to pension
received from former employer 


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. 
Representations have been received seeking clarification as to whether a
taxpayer, who receives pension from his former employer, shall also be
eligible to claim this deduction. 
The pension received by a taxpayer from his former employer is taxable
under the head “Salaries”. 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. 
(Surabhi Ahluwalia)
Read also :  CPAO: Marking of PPO number in the bank passbook - reg.
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT 

pensioners-eligible-to-40000-standard-deduction-in-2019-20

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