Income Tax Exemption 5 lakhs to Pensioners – Clarification “Exemption of Rs. 5 lakhs per annum to pension income”

Shiv Pratap Shukla

D.O.No.370150/9/2017-TPL MINISTER OF STATE FOR FINANCE GOVERNMENT OF INDIA NEW DELHI – 110001

 14th November, 2017

Dear Dr. Tharoor ji,

Kindly refer to your D.O.letter No. DO/ST/09/2017/986 dated 26.09.2017 requesting for providing exemption of Rs. 5 lakhs per annum to pension income.

I have got the matter examined. Currently, the basic exemption limit for individual tax payer is Rs. 2,50,000. However, considering the specific needs of the senior citizens, the basic exemption limit for a senior citizen above 60 years is fixed at Rs.3,00,000 and for very senior citizen i.e. above 80 years, the same is fixed at Rs. 5,00,000.

Therefore a pensioner who is a senior citizen is not required to pay any income-tax if his total income, including pension, does not exceed Rs. 3 lakhs. Similarly, a pensioner who is very senior citizen is not required to pay tax if his total income, including pension, does not exceed Rs. 5,00,000. 

However, the suggestion that pension up to Rs. 5 lakhs per annum should be exempt in all cases would require amendment to the existing provisions of the Income-tax Act, 1961.

Accordingly, the proposal would be examined during the exercise for the ensuing Union Budget, 2018 and the outcome would be reflected in the Finance Bill, 2018.

With regards, 

Yours sincerely,

(Shiv Pratap Shukla)

Dr. Shashi Tharoor, 

Member of Parliament (LS) 116, 

Block B, 

Parliament House Annexe Extension, New Delhi – 110001