CBDT

[Sanjeev Goyal]

 

PMOPG/E/2025/0130584

 

Sub: Income Tax Law.

Concerned Department: Central Board of Direct Taxes.

 

(1)  Under section 10(10A) commutation of pension received by the employees of corporation established by a Central, State or Provincial Act is exempt without any ceiling. However, there is no clarity available about the word corporation. Is it meant for municipal corporation or any entity framed by an act of legislature is covered in it? Or the employees of any public entity having the word corporation as a part of its name can claim this relaxation? Adequate clarification needs to be issued by CBDT to avoid ambiguity in this area.

 

(2)  Under section 10(10A)(i) commutation of pension is also exempt for the employees of corporations established by state or provincial act. Meaning of the word corporation here also requires clarification.

 

(3)  While filing ITR several options for category of occupation under the salary head are made available to public like (1) Central Govt, (2) State Govt, (3) PSU, (4) CG-Pensioner, (5) SG-Pensioner, (6) PSU-Pensioner, (7) Other Pensioner, (8) Others.

 

Here point to note that while going through the options it appears that the thought process is totally focussed towards Government job. At present, the private sector which is the largest employment generator for the country has been put under the head ‘others’. No category has been given either for salary or pension for employees of central Autonomous Body (CAB) which is giving employment to lakhs of people. While employees of State Asutonomous Body are considered employees of state Government, the employees of CAB are not considered Government employees. The order of this option may be reviewed and re-sequenced in order of strength of respective sector.