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Understanding Income Tax on Pensions with PensionBox
Remy Sharp
Vaishnavi Verma
  • June 20, 2024
  • Pension & Retirement
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    Blog Related Questions

    Are government pensions taxable in India?Yes, government pensions are taxable in India.

    The tax implications depend on the type of pension received:
    1. Pension Received as Annuity: This type of pension is completely taxable.
    2. Commuted Pension: For government employees, a commuted pension is fully exempt from tax.
    3. Uncommuted Pension: This is taxed as salary income.

    Whereas, Investing in Pension schemes like NPS backed by GOI can help you save taxes on your gratuity, for more information read our blog "NPS and Tax saving method explained by PensionBox"
    What tax exemptions are available for pensioners in India?Pensioners in India can avail of several tax exemptions and deductions to reduce their taxable income:

    1. Standard Deduction: ₹50,000 annually.
    2. Section 80D: Deductions for health insurance premiums paid by senior citizens.
    3. Section 80 TTB: Deduction of up to ₹50,000 for interest income from deposits.
    4. Section 80C: Deductions up to ₹1.5 lakhs for contributions to specified pension funds.
    5. Other Deductions: Under sections 80DD, 80DDB, and 80U for medical expenses and disabilities.

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