<h1>CBDT Clarifies Pension from Former Employer Taxable as Salary; Standard Deduction Available u/s 16 Income Tax Act.</h1> The Central Board of Direct Taxes (CBDT) has clarified that pension received from a former employer is taxable under the category of Salaries. According to the Finance Act, 2018, Section 16 of the Income Tax Act, 1961, allows a standard deduction of Rs. 40,000 or the amount of salary, whichever is less, for computing taxable income. This deduction is applicable to taxpayers receiving a pension from their former employer, allowing them to claim up to Rs. 40,000 or the pension amount, whichever is less, under Section 16. This clarification addresses previous inquiries regarding the eligibility of pensioners for this deduction.