ITR
Relief on commuted pension
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Facts
Commuted pension is partly exempt depending on whether you also receive gratuity. Form 10E has an Annexure for commuted pension, which gives relief on the taxable part.
Provisions and law
- Sec 89 (now Sec 157)Relief when salary or family pension is received in arrears or in advance
- Sec 10(10A), Income-tax Act 1961Exemption for commuted pension
Analysis
A non-government employee who received gratuity can get one-third of the full commuted value exempt; without gratuity, half is exempt. Government employees get full exemption. The taxable balance can get Sec 89 relief using the Annexure. Compute the exemption first, then the relief on what remains.
Conclusion
- Work out the exempt part of commuted pension
- Fill the commuted pension Annexure in Form 10E
- File Form 10E before the ITR
- Claim relief and exemption correctly in the ITR
The 2025 Act number for Sec 10(10A) is not confirmed in our mapping; cite the 1961 section for past years.
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