Let EPFO pension and superannuation annuities be exempted under standard deduction of 40k.
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The Central Board of Direct Taxes has clarified that as long as you receive pension directly from your former employer you can deduct 40,000 from taxable income as standard deduction. This is based on the assumption that pension is the wages which you did not enjoy during your working life. Similarly many employees of private sector have forgone benefits like greater employer's contribution to PF to pay for Employees Provident Fund based Pension scheme (EPS). Similarly many of us have forgone our statutory bonus (Supreme Court has called it deferred wages) to put money into Group Superannuation Fund (mostly run by LIC) so that we can get pension (payable on the annuity system of LIC) in our old age. There is perfect justification for including EFPO pension and Superannuation annuities in the 40,000 standard deduction as they are in fact deferred wages channelised through EPFO and LIC. Many seniors are not even aware that these two are not included!
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