Scrap Income Tax on Pension !
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Presently “Pension” is taxable under the head salaries in your Income Tax Return. Usually pension is paid out periodically, on a monthly basis. You may also choose to take pension as a lump sum (also called commuted pension) instead of a periodical payment.
Commuted pension or lump sum received is exempt in certain cases.
For government employees, commuted pension is fully exempt.
Uncommuted pension or any periodical payment of pension is fully taxable as salary. WHY ??
After putting several years of service and paying income tax which is deducted at source, you retire and receive a monthly pension. The salaried class is one who cannot manipulate or hide income and its sources; hence he is the one who honestly and promptly pays Income tax.
PENSION is not Salary; it is something like sustenance a person gets in his sunset years. Whatever he buys with this sustenance money has a tax component which is loaded on the consumer. Pension is also deemed to provide some financial security for the old people. Since life expectancy has gone up considerably, it becomes more and more difficult to make ends meet at later stages of life.
Is is fair to tax Pension money ??
There is a case for completely exempting “Pension” from Income Tax.
This will ease the life of several Senior and Super Senior citizens who are presently struggling with the burden of filing Income Tax returns and also help the Income Tax department to focus on real income earning class and not scrutinize Income Tax levied on sustenance money called “PENSION”.
Sign my petition asking the Prime Minister and the Finance Minister to consider fully exempting Pension Income from Income Tax purview.
It is time we put forth these questions and suggestions to the Government of India and exercise our right.
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