Taxation in Pension Plan
by The policyholder would get a tax rebate under section 80CCC(1) according to the Income Tax Act for the amount of money which is paid towards the pension fund or corpus till Rs 1,00,000 per year.
The policyholder would get a tax rebate under section 80CCC(1) according to the Income Tax Act for the amount of money which is paid towards the pension fund or corpus till Rs 1,00,000 per year.
At the time of retirement, you would have various options
1. Withdraw the ENTIRE retirement corpus in one go, where 1/3 of the same would be considered as tax free under section 10(10)A of the Income Tax Act and the rest of the 2/3 would be added on your taxable income in that particular year
2. Withdraw only 1/3 of the fund as it is tax free under section 10(10)A of the Income Tax Act and take pension from the insurer for the remaining 2/3 of the corpus
3. Or shift the entire corpus to another insurer for better pension rates, options or service. This option is available to all pension holders under Open Market option regulation by the IRDA.
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