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

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.