Income tax rules for annuity received from LIC

I superannuated from a PSU firm. After my retirement my employer deposited some cash with LIC (Life Insurance coverage Company) for annuity. Out of that cash LIC is paying me ₹9,299 p.m. as annuity. I need to know as to below which head of earnings, the annuity obtained from LIC, is to be supplied? Whether it is to be taxed below the top Salaries am I entitled to say commonplace deduction of fifty,000?

My spouse has additionally deposited some cash below Pradhman Mantri Vyay Vandna Yojna (PMVVY) of LIC of India. Please affirm whether or not she will be able to declare commonplace deduction of ₹50,000?

-S.N Tiwari

By Balwant Jain, Chief Editor, ApnaPaisa

An worker is entitled to say commonplace deduction, as much as a most quantity of ₹50,000 in a monetary yr, in opposition to any earnings which is taxable below the top “Salaries”. The usual deduction is on the market in opposition to wage obtained whether or not in arrears or upfront or for present interval. Along with wage obtained in current employment, pension obtained from the ex-employer additionally turns into taxable below the top Salaries. So the ex-employees are additionally entitled to say commonplace deduction in opposition to the pension earnings.

For all of the pension which accrued to an individual by advantage of his employment, whether or not obtained from employer or not, the tax payer can declare the usual deduction. So pension obtained by a retired particular person from Worker Provident Fund Workplace (EPFO) in addition to an annuity obtained from LIC or an insurance coverage firm, in respect of annuity purchased by the employer for superannuation, turns into taxable below the top “Salaries” and thus entitle the recipient to say commonplace deduction.

Please notice that any periodic cost obtained as pension, on an annuity bought by you straight, turns into taxable below the top “Earnings from different sources” and never “Salaries” due to this fact not eligible for normal deduction.

For the explanations defined above the annuity obtained by your from LIC turns into taxable below the top “Salaries” and due to this fact entitles you for normal deduction.

The annuity earned by your spouse below Pradhman Mantri Vyay Vandna Yojna (PMVVY) is taxable below the top “Earnings from different sources” so your spouse will not be entitled for this deduction.