Pension Income is Exempt from Income Tax?

There is common misconception in a mind of some people that the Pension income is exempt from Income Tax, so we do not need to file Income Tax Return.

As per Section 17(1) of Income Tax Act,1961 as amended by Finance Act from time to time, “Salary” includes “any annuity or Pension”.

Many people often misunderstood that the Pension income is exempt from Income Tax or we do not file return as we get Rebate under section 87A of Income Tax Act of Rs.12,500.

Availing rebate under section 87A of Income Tax Act and Filing Return of Income are two separate things.

For claiming rebate under section 87A a person has to file Return and claim rebate under section 87A of Income Tax Act.
A person can not deviate from liability to File return of Income saying that, a rebate is applicable under section 87A and hence need not File a Return of Income.

If you are having any other income such as Bank Interest, Rental Income from House Property, Income from sale of Mutual Funds/Shares AND GROSS TOTAL INCOME BEFORE CLAIMING DEDUCTION UNDER CHAPTER VI-A and section 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB is above Basic Exemption Limit then you are mandatorily required to File Income Tax Return.

What is BASIC EXEMPTION LIMIT as per Income Tax Act?

It is Basic Limit above which income is chargeable under Income Tax Act,1961.

What is Tax rate FOR Assessment Year 2022-23

FOR INDIVIDUALS: BELOW AGE 60

FOR INDIVIDUALS/HINDU UNDIVIDED FAMILY: AGE 60 OR MORE (SENIOR CITIZEN)

FOR INDIVIDUALS/HINDU UNDIVIDED FAMILY: AGE 80 OR MORE (VERY SENIOR CITIZEN)