Section 10(10A)(i) — the law in short
What the courts have decided on section 10(10A)(i), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.10(10A): commuted pension, why a corporation established by an Act is on the government side of the line, and the one-third / one-half rule that turns on gratuity
CBDT Circulars & InstructionsCuts both ways
My client has commuted part of his pension from a private employer's scheme and received a lump sum. How much of it is exempt, and does it make any difference that he also drew gratuity?
It makes all the difference. Under s.10(10A)(ii) a payment in commutation of pension received under any scheme of any other employer is exempt only to the extent of the commuted value of one-third of the pension he is normally entitled to receive where he receives any gratuity, and the commuted value of one-half of such pension in any other case. Under s.10(10A)(i) the commuted pension is exempt without any limit at all for the classes listed there — which include not only Central and State Government servants and the all-India and defence services but also employees of a local authority and of a corporation established by a Central, State or Provincial Act — and under s.10(10A)(iii) any payment in commutation of pension received from a fund under clause (23AAB) is exempt without limit.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.