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Sunday, January 10, 2010

RETIREMENT BENEFITS : 6TH CPC

MONEY MANTRA



I retired from the Indian Army in August, 2006, and am eligible for retirement benefits as per the Sixth Central Pay Commission (SCPC). I was paid Rs 3.5 lakh as death-cum-retirement gratuity in 2006, prior to implementation of SCPC which was exempt from I-T. Accordingly, the limit of DCRG was raised to Rs 10 lakh on the acceptance of SCPC proposals. The balance Rs 6.5 lakh was released in July 2009. As per the I-T Act 1961 the relevant section (Sec. 10(10) on gratuity, any death-cum-retirement gratuity received by Central and state government employees, defence employees and employee in local authority shall be exempt. Please clarify if Rs 6.5 lakh released as balance of DCRG is to be counted as income for FY 2009-10 or is it exempt.

PS Grewal

Death-cum-retirement gratuity received u/s 10(10) of the Income-Tax Act, 1961, by the specified employees, including members of the defence services, is exempt from tax irrespective of the payment made in two years.

1 comment:

  1. I’ve been trying to find out more info on military retirement for my husband. Thank you for all of the help. I’ve been looking for a good explanation about military retirement for my husband, so this will definitely come in handy.

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