TAXABILITY OF PENSION OF AN GOVERNMENT EMPLOYEE

[S.C. WADHWA]

1. Under Which head 7th pay commission is taxable

2. Whether pension have breakup as salary into Basic, DA, Medical Allowance

3. If yes, how it is taxable, whether medical will be exempted upto ₹ 15000

4. How salary/pension of Government employee is taxable, whether for April to March or March to Feb

[DR.MARIAPPAN GOVINDARAJAN]

1. This question is not correctly framed.

2. Yes. there is break of up basic pay, DA, medical allowance etc.,

3. Yes, admissible as per the latest provisions of income tax act.

4. April to March.

[S.C. WADHWA]

Sir,

Thanks for reply

I am correcting my first question under which head arrears as per 7th pay commission is taxable.

I want to reconfirm that You have confirmed that Pension has also breakup into Basic, Medical Allowance. Whether medical allowance will be exempted upto ₹ 15000/- upon submission of medical bills. Please reconfirm.

[DR.MARIAPPAN GOVINDARAJAN]

Reimbursement of medical allowance is allowed up to the limit prescribed i.e., ₹ 15000/- per year. It will not form part of pension.

AI Summary

Medical reimbursement exemption clarified; reimbursed medical allowance excluded from pension and eligible for tax exemption. Pension is structured into Basic, Dearness Allowance and allowances including medical allowance; salary/pension income is assessed on an April-March basis. Reimbursement of medical expenses is allowable up to the prescribed statutory limit of Rs. 15,000 per year and, when reimbursed under the Income tax Act provisions, does not form part of pension income and is treated separately for tax purposes.