[mtripathi13]

Originally Posted by Hatari

.

Is the % commutation (of the current NAV) at the discretion of the Insurer or Income Tax laws please? And which section would this be tax free under? Also would it be Net gain after deducting value of of the Annual premiums I have paid?

Sir,
The following are the pointwise replies to your queries:

1. There is no limiting factor under income tax laws wrt commutation of pension. The income tax only talks about what portion of ‘commuted pension’ will be exempt and what portion will be taxable. No where it controls the portion of commutation.

2. Commutation of pension from a fund referred to in Section 10(23AAB) is exempt under Section10(10A) (iii). IRDA approved funds are governed by 10(23AAB).

3. The annual premiums that you have paid must have been taken as deduction u/s 80CCE. So the question of deducting once again does not arise. The equation is very simple. Commuted pension is exempt. Uncommuted pension is fully taxable.

[Hatari]

Originally Posted by mtripathi13

Sir,
The following are the pointwise replies to your queries:

1. There is no limiting factor under income tax laws wrt commutation of pension. The income tax only talks about what portion of ‘commuted pension’ will be exempt and what portion will be taxable. No where it controls the portion of commutation.

2. Commutation of pension from a fund referred to in Section 10(23AAB) is exempt under Section10(10A) (iii). IRDA approved funds are governed by 10(23AAB).

3. The annual premiums that you have paid must have been taken as deduction u/s 80CCE. So the question of deducting once again does not arise. The equation is very simple. Commuted pension is exempt. Uncommuted pension is fully taxable.

Thanks Manish.

Need a bit more clarification pls, as been receiving conflicting information.

Is only 60% of the NAV tax free? Pl explain point 2.
https://www.financialexpress.com/mon...mpact/1742830/

[condor]

Question regarding refund:

1. Bank account in the IT portal was updated (account moved from one branch to another).
2. After above update, both accounts were listed in the user account.
3. Neither entry was set as "Nominate for refund".

4. IT returns were submitted in July end. Refund is due.
5. Refund had not come, so on checking the details. Recently, #3 was observed and corrected.

Does anything need to be done now to get the refund, or will the systems pick up the update and process the refund ?

[thanixravindran]

Originally Posted by Hatari

Thanks Manish.

Need a bit more clarification pls, as been receiving conflicting information.

Is only 60% of the NAV tax free? Pl explain point 2.
https://www.financialexpress.com/mon...mpact/1742830/

I think this is not about income tax but the way withdrawal is allowed. Only 60% is allowed as cash withdrawal and remaining part has to be used to buy annuity products. In this case, there is no income tax directly. However I believe the pension coming from annuity products will be taxable each year as per tax slab. Generally annuity products do not offer great return. This is one of the reason NPS has not picked up much in private sector.

[mtripathi13]

Originally Posted by Hatari

Is only 60% of the NAV tax free? Pl explain point 2.

Sir,
I understand how this confusion arose in your mind. Let me try and decode this for you. Kindly note the following:
1. When the non-employer-based pension policies were first launched by IRDA approved entities, it was provided that on completion of tenure/age of 58, certain portion shall be commuted and rest shall be used to buy an annuity. This commutation portion was 1/3rd or 33% of the total value of ‘CORPUS’. There was no concept of partial withdrawal at first. Annuity was taxable.
2. Then the central government launched the National Pension System or NPS. Here initially the maximum allowable commutation was 40% of corpus, compared to 33% in IRDA policies.
3. This limit of 40% was raised subsequently to 60% by NPS. It also allowed partial withdrawal of own contribution of up to 25% maximum thrice.
4. Post this change by NPS, the IRDA also did the same change. This is borne by the article that you have quoted in the link.
5. Accordingly, the 60% limit is for the corpus commutation. Once it is commuted, the amount is exempt under section 10(10A) (iii).
6. Kindly refer to my first reply. I had categorically said that try to get as much commutation as possible. Since yours is premature closure, I doubted that you will be allowed to commute the entire 60% of your corpus.
7. The equation remains simple. Whatever you commute, it is exempt. Annuity is taxable. The only question/point is what percentage of your corpus you will be able to commute. Your insurer may or may not allow 60% in case of premature closure.

Hope the above clarifies the position.

Originally Posted by condor

Question regarding refund:

Does anything need to be done now to get the refund, or will the systems pick up the update and process the refund ?

Sir,

Please take the following steps:

Originally Posted by thanixravindran

Generally annuity products do not offer great return. This is one of the reason NPS has not picked up much in private sector.

Sir,

A little disagreement on this point. I believe the returns are outright brilliant in NPS. You just need to choose your risk profile and have to have a longer term perspective. See the funds or Assets under Management (AUM) are managed the same way as in MF by the fund managers. NPS allows you to choose you risk profile which I think is quite good.

As a financial advisor, I strongly advise my clients for NPS. At times I have even advised to do SIP not in MF but in NPS.

Regards
Manish

[Hatari]

Originally Posted by mtripathi13

7. The equation remains simple. Whatever you commute, it is exempt. Annuity is taxable. The only question/point is what percentage of your corpus you will be able to commute. Your insurer may or may not allow 60% in case of premature closure.

Hope the above clarifies the position.

Thanks Manish, now clear. Insurer is allowing 60% commutation.
I was trying to find a way of tax saving on the balance 40%.

[condor]

Originally Posted by mtripathi13

Sir,

Please take the following steps:

Attachment 2403122

Thanks, @mtripathi.

Not seeing the New Service Request link anywhere. Upon login, the dashboard comes up. Services and Grievances are two of the options at the menu bar on top.

[mtripathi13]

Originally Posted by condor

Thanks, @mtripathi.

Not seeing the New Service Request link anywhere. Upon login, the dashboard comes up. Services and Grievances are two of the options at the menu bar on top.

Sir

Please have a look at the following screenshot. See the third option under services.

[dragonfire]

Experts, need some help

I had filed my taxes in July 2022, but when I paid the tax due, it didn't reflect in the return. Then I received a demand letter which was 220 rupees more than what I paid, so I simply paid 220 and forgot it. Now I have again got a reminder. I login to see that the amounts I paid is showing up in the AIS as self assessment tax.



The website still shows a deman against the tax filing along with interest



So I have two questions.

1) Can I pay the demanded amount and close that demand, and then use the amount I paid earlier for next year's tax filing (as it is showing up as self-assessment tax)?

2) How do I make sure that the amount I am paying now is applied to the demand and not accounted as a self-assessment tax?

Thanks in advance.

[rajesh1868]

Originally Posted by dragonfire

Then I received a demand letter which was 220 rupees more than what I paid, so I simply paid 220 and forgot it. .

I too had the same experience with Rs 240 demand. There was an option to say the demand is not correct and we can upload the chalan details. But that has not helped me yet.

[blorebuddy]

Originally Posted by dragonfire

How do I make sure that the amount I am paying now is applied to the demand and not accounted as a self-assessment tax?

Thanks in advance.

I had the same issue even after paying the interest mentioned. Finally I have to do this (All Income Tax Queries (refunds, disputes, rates etc...))following to get it reflected.

[Fx14]

Originally Posted by mtripathi13

1. When the non-employer-based pension policies were first launched by IRDA approved entities, it was provided that on completion of tenure/age of 58, certain portion shall be commuted and rest shall be used to buy an annuity. This commutation portion was 1/3rd or 33% of the total value of ‘CORPUS’. There was no concept of partial withdrawal at first. Annuity was taxable.

7. The equation remains simple. Whatever you commute, it is exempt. Annuity is taxable.

Regards
Manish

@Manish,

Would the same treatment of tax exemption apply to Superannuation policy provided by IRDA approved entities for amount commuted @ 1/3rd of the amount accrued at the time of resignation from the organisation before attaining the age of 58, if further employment was not taken up?

[mtripathi13]

Originally Posted by Fx14

@Manish,

Would the same treatment of tax exemption apply to Superannuation policy provided by IRDA approved entities for amount commuted @ 1/3rd of the amount accrued at the time of resignation from the organisation before attaining the age of 58, if further employment was not taken up?

Dear Sir,

Exemption of commuted pension is covered by section 10(10A).There are three subsections of this section. First two subsections deal with pension from employer-employee relationship. The third section relates to non-employer pensions, which was the subject matter in my earlier replies.

Subsection 10(10A)(i) relates to commuted pension received by employees of Central government/local authorities/statutory corporations/members of defence services etc. In this case the entire commuted pension is exempt.

Subsection 10(10A)(ii) relates to commuted pension received by ‘other employees’ i,e. employees other than those covered above. In this case, if the employee also receives gratuity, then 1/3rd of commuted pension is exempt. If the employee does not receive gratuity then one half or 50% of commuted pension received shall be exempt.

As already mentioned subsection 10(10A)(iii) relates to commutation of pension which does not have employer-employee relationship i.e. self contributed IRDA entities. This has already dealt by my earlier replies.
So, the exemption in your case will depend on the nature of employment. You can easily understand the situation based on my above- mentioned points.

Warm Regards
Manish

[condor]

Originally Posted by mtripathi13

Please have a look at the following screenshot. See the third option under services.

THanks, @mtripathi.

I tried that. However, the option of Refund Re-issue is not available for use. Looks like the Refund was never issued for this year, and hence would have to wait a bit before trying again/ reaching out to IT department through the CA who filed the returns.

[Ashwintona675]

I have filed on July 2022. My application is still under processing. Anyone in the same boat? What is the due date for completion of processing?

I have raised query and they have responded saying please wait for processing to complete.