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Anil Rego | Answer |Ask -Follow

Financial Planner - Answered on Aug 26, 2022

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more

Question by Bipin on Aug 26, 2022Hindi

Money

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.

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 Mahadeo - 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!
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Question by Sushil - Dec 13, 2023Hindi

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I am in Defence. I will superannuate at the age of 57 yrs. Can I withdraw full amount from NPS Tier-1 account (invested 4.5 L till date) at the time of superannuation i.e., at 57 yrs or have to wait till 60 yrs?

Ans: A Subscriber can claim 100% Withdrawal if the total accumulated corpus is less than or equal to Rs. 5 lakh at the time of Superannuation/attaining age of 60 years. However, please note that it is 'total accumulated corpus' including the returns accumulated and not only your invested amount.

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Asked by Anonymous - Nov 20, 2024Hindi

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I have superannuation schrme with presemt employer and they have discountinued the same. I sm of age 54 years now and employer asked to withdraw 33% fund and balance fund will convert in pension scheme. I have question that this 33% fund will attract tax as per Invome tax of Indian Govt?

Ans: 01. Payment of 33% of Fund being received at the time of Voluntary Retirement/Superannuation is taxable under the head "Income from Salary." However, a maximum of Rs.5,00,000.00 is exempted u/s 10(10)(C), subject to certain conditions. Since your question does not specify the nature of Job, the Company in which you served, Length of service & Whether the scheme of Superannuation is approved or not etc,, it is difficult to give you a clear view.
Most welcome for any further clarifications. Thanks.

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Question by Sushil - Mar 14, 2025Hindi

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Is superannuation at the age of 57 years eligible for annuity in NPS Tier 1 account? Because I am superannuating as a Group Captain of Indian Air Force at the age of 57 years, in Jun 2025.

Ans: When a Subscriber reaches the age of Superannuation/attaining 60 years of age, at least 40% of the accumulated pension
wealth of the Subscriber needs to be utilized for purchase of an Annuity providing for a regular pension to the Subscriber and the balance pension wealth is paid as lump sum to the Subscriber.
In case, the total corpus in the NPS account is less than or equal to Rs. 5 lakh, Subscriber can avail the option of complete (100%) Withdrawal.

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Hello sir , My daughter (general category ) secured 58456 rank in Jee mains and 26260 rank in viteee and is in phase 2 counselling, what are the possible categories he may get for CSE spe, ect etc

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Admission to CSE at top or mid-tier NITs is highly unlikely for you. However, you have strong possibilities for specialized CSE branches in newer NITs and core engineering branches in mid-to-lower tier NITs. Examples include:

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Hello sir, my daughter gets VITEEE rank 66055. Can she get core branches like mechanical engineering in VIT vellor or VIT chennai, and what will be possible category? Thanks.

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My son got 56000 rank in vit which category possible in biotechnology

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Regarding your SON'S rank in VITEEE, your son can secure a B.Tech in Biotechnology in higher categories. He may have options at the Chennai campus in Categories 3-5, and at Bhopal & AP in Categories 1-3. Unfortunately, there is no feasibility in Vellore. Please proceed and participate in the counselling process to achieve his goals.

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Vit rank 34000 which category available bin cse

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GREETINGS FROM REDIFFGURUS!
With respect to your rank in VITEE, you can secure a seat in Computer Science at VIT Chennai (CSE core/specialized, in Categories 4/5) or at Bhopal and AP (CSE core/specialized, in Categories 1/2). Be sure to participate, plan carefully, and acquire a seat during the counselling process to achieve your goals.
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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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