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Hardik Parikh |106 Answers |Ask -Follow

Tax, Mutual Fund Expert - Answered on Jul 18, 2023

Hardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He also holds an MBA degree from IIM-Indore.
Hardik, who began his career as an equity research analyst, founded his own advisory firm, Hardik Parikh Associates LLP, which provides a variety of financial services to clients.
He is committed to sharing his knowledge and helping others learn more about finance. He also speaks about valuation at different forums, such as study groups of the Western India Regional Council of Chartered Accountants.... more

Question by Mahadeo on Jul 07, 2023Hindi

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Dear Mr. Hardik, I am retired and receiving superannuation from the annuity bought by my company. Is this amount quality as pension and if yes I am entitled for standard deduction? Mahadeo

Ans: Dear Mahadeo,

Thank you for reaching out with your question. Yes, the superannuation received from the annuity purchased by your company is considered as pension income in India.

As for the standard deduction, as per the Income Tax Act, a standard deduction of Rs. 50,000 is allowed on pension income. This means that you can reduce your taxable income by Rs. 50,000, which in turn reduces your tax liability.

However, I would recommend consulting with a tax advisor or a chartered accountant to understand the specifics of your situation and ensure you're taking full advantage of any deductions or exemptions you're eligible for.

I hope this helps!
Best,
Hardik

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Question by Bipin - Aug 26, 2022Hindi

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I have query on Superannuation. As I am looking completing 15 years of service and if I resign now following queries are coming to my mind: a) Is Superannuation exempted from Tax? If yes, what is the limit? b) What is procedure of Transferring Superannuation to next company? In the same way, please confirm on the gratuity component.

Ans:

a) Superannuation taxability is based on certain criteria:

If you are withdrawing the superannuation amount while leaving the company, the entire amount will be subjected to tax. This will be accounted as income from other sources, added the income and taxed as per your tax slab
If payment is made to the employee as an annuity after the retirement: 1/3^rd of amount will be tax free and the remaining annuity will be taxed as per your tax slab at retirement
It is not taxable if payment is made to the employee who is incapacitated by a disability or illness, or other reasons or payments made after death of employees to legal heirs

If both the parties (old and new employer) agree, then you can transfer the amount to new employer, provided the new company has an approved superannuation fund. If not, you can continue keeping the money in the existing superannuation account.

b) Gratuity is exempt from tax on the least of the following:

Up to 20 lakh currently: Last salary (basic + DA)* number of years of employment* 15/26
Actual Gratuity received
For government employees, gratuity is fully exempt from tax.

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