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No tax on pension from United Nations

For almost 20 years I am working with the UN. I am going to retire from service and shall be entitled to pension. The salary earned by me from UN was not taxable. Is the pension received by me taxable?



SC VASUDEVA

For almost 20 years I am working with the UN. I am going to retire from service and shall be entitled to pension. The salary earned by me from UN was not taxable. Is the pension received by me taxable? — Surinder Kumar

No, the amount of pension received by you would also be exempt from tax in accordance with the UN (Privileges and Immunities) Act, 1947. This is also in accordance with a Circular No. 293 dated February 10, 1981.

I am a retired Punjab Government official, senior citizen and filing income tax returns regularly and paying tax as admissible. My son is a major. He is having his own income from commercial property and from his business and as such he is also filing his tax returns and paying the admissible tax. He obtained a life insurance policy from LIC worth Rs 7,50,000. The commencement  date of the policy is 09-12-2009 and its maturity date is 09-12-2019. He is paying half-yearly premium of Rs 39,591 (yearly Rs 79,821). He is paying the premium from his own sources and claiming benefit under Section 80C of the Income Tax Act.  Kindly clarify the following: 

  • If I pay the insurance premium from my own sources and from my personal bank account, can I, being the father, claim the benefit of deduction under Section 80C.  In such a case, he will forego this benefit and will not claim   deductions under Section 80 C.
  • Kindly clarify if any other blood relative is entitled to avail this deduction, and any conditions under the Income Tax Act.
  • The maturity value of this policy will be above Rs 10 lakh, original amount and bonus. Kindly intimate whether this maturity amount will be tax free and no TDS will be deducted at the time of payment.  I understand that this income will be exempted under Section 10 (10 D) of the Income Tax Act. Kindly confirm. — Jagdish Singh
  • You would be entitled to claim deduction in respect of the life insurance premium paid to keep in force life insurance policy on the life of your son. Sub-section 4 of Section 80C of the Income-tax Act, 1961 (The Act) provides for this benefit.
  • According to the provisions of the aforesaid sub-section of Section 80C of the Act, an individual can pay premium to keep in force an insurance policy on his own life, on the life of his spouse and any child of such individual. A deduction in respect of premium paid to insure the life of their children therefore can be claimed either by husband or wife, as the case may be.   
  • No other blood relations can claim deduction in respect of the premium paid on the life of an individual.
  • Maturity value of the policy, original amount and the bonus thereof shall be exempt as the policy was taken by your son in December 2009. The amended provisions are applicable to policies taken after April 1, 2012.

I am a Punjab Government retiree and a senior citizen residing in Punjab. I was recommended a hearing aid after conducting the tests at the PGI Chandigarh but neither I requested nor the PGI issued the certificate showing the percentage of hearing impairment. I read in your column that a person having loss of 60% decibels or more in the better ear in the conversation range of frequencies is entitled for the deduction of Rs 50,000 from his income (for income tax) under Section 80U. Please let me the medical authority for the issuance of such certificate i.e. the Medical Superintendent of the PGI or the District Civil Surgeon concerned. — Ram Kumar

The medical authority as defined by Section 2 of Person with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, any hospital or any institution specified for the purposes of this Act by notification by the appropriate government. The appropriate government has been defined as under: 

  • in relation to the Central Government or any establishment wholly or substantially financed by that Government, or a Cantonment Board constituted under the Cantonment Act, 1924 (2 of 1924), the Central Government;
  • in relation to a State Government or any establishment wholly or substantially financed by that Government, or any local authority, other than a Cantonment Board, the State Government;
  • in respect of the Central Co-ordination Committee and the Central Executive Committee, the Central Government;
  • in respect of the State Co-ordination Committee and the State Executive Committee, the State Government; 

It would thus be observed that any medical authority which is wholly or substantially financed by the Central Government or the State Government would get covered as medical authority under the above said Act. You can, therefore, obtain the certificate required to be filed along with return from the medical authority so covered. It may also be added that deduction for a disability allowable to a resident individual has been increased to Rs 75,000 for assessment year 2016-17 and onwards. 

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