Retirement · component
Pension received
Regular pension is taxed as salary; commuted pension is exempt within limits.
How the taxable value is determined
Uncommuted (monthly) pension is fully taxable as salary. Commuted pension is fully exempt for government employees; for others, one-third of the commuted value is exempt where gratuity is also received, and one-half where it is not.
Regime availability
- Old regime
- Available
- New regime
- Available
Documentation to keep
Pension payment order and the commutation computation.
Legal basis: Section 10(10A), Income-tax Act
Frequently asked questions
Is pension received taxable in India?
Regular pension is taxed as salary; commuted pension is exempt within limits. Uncommuted (monthly) pension is fully taxable as salary. Commuted pension is fully exempt for government employees; for others, one-third of the commuted value is exempt where gratuity is also received, and one-half where it is not.
Does the exemption apply under the new tax regime?
Under the old regime this treatment is available; under the new regime it is available. Legal basis: Section 10(10A), Income-tax Act.
What records should I keep for pension received?
Pension payment order and the commutation computation.
Related tools & guides
Reflects provisions in force for FY 2026-27; verify against the latest government publications (incometax.gov.in). Information, not tax advice.