Akash is entitled to get a pension of ₹6,000 per month from a private company. He gets 60% of the pension commuted and receives ₹3,60,000. He also receives ₹2,00,000 as gratuity from the same employer. The taxable portio

CS Executive · Tax Laws and Practice · PYQS · December 2014
Akash is entitled to get a pension of ₹6,000 per month from a private company. He gets 60% of the pension commuted and receives ₹3,60,000. He also receives ₹2,00,000 as gratuity from the same employer. The taxable portion of commuted value of pension will be —
(A) ₹1,60,000
(B) Nil
(C) ₹3,60,000
(D) ₹60,000.

Answer & Explanation:

Correct Answer: Option (A)

Correct answer: (A) ₹1,60,000. Full commuted pension value = 3,60,000/60% = 6,00,000. Since gratuity is received, exemption is one-third, 2,00,000. Taxable part = 1,60,000. This answer applies to the historical law and assessment-year context of this December 2014 paper; later amendments may differ.

Topics: Income Tax Act, 1961

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