As regards my pension query: At Banking Industry level It was declared by IBA that banks do not have enough funds to pay to the new pensioners.(How surprising the Banking industry as a whole has made tremendous profits since last so may years but for pension payment they do not have funds). As a result a via media was found out that if the gap in the pension fund is met out by Banks @70% and by employees @30% then this scheme of offering second pension option becomes viable.
I am refering to this 30% which every employee contributed to meet the gap in the pension fund.To take an actual case the details are as under.
Banks contribution received by employee Rs.10,21,858
Add: 56% of above(
(employees’ share to meet gap in pension funds Rs.572240
less commutation RS.714089
less Pension arrears payable Rs.274008
Net amount to be paid by employee Rs.606001
From the above data my question is whether Rs.274008 by way of pension arrears can be claimed as an exemption as it is adjusted against the purchase amount.
One reply on this article “Pension”
Dear Rajnikant, the mentioned Pension arrears were not received by you as Income from your employer, instead the same were used by your Employer to purchase Pension for yourself, hence it can’t be taxable in your hands as you have not received the money in actual.