Commuted pension is exempt from tax

Do I must fill Schedule HP even when there isn’t any revenue or loss to be reported from my home property? Whereas filling Schedule HP in ITR-3, I get the next error: ‘Possession of home is chosen as co-owned home property, however assessee’s share and co-owner(s)’ share shouldn’t be equal to 100%. Kindly confirm the co-ownership particulars and ensure the co-owner’s share and your share is the same as 100%’. I’ve solely entered property particulars and the co-owners’ particulars together with share proportion. The revenue, curiosity, nevertheless, are nil.



We’ve presumed that this property is situated in India. As per directions issued for submitting Type ITR-3 for FY 2020-21, the main points of every property owned or co-owned by you through the yr is required to be reported in Schedule HP beneath the top ‘home property’.

The place the property is co-owned, your possession proportion and the title, PAN and respective possession proportion of all different co-owners are required to be reported. The overall of the possession percentages of all co-owners (together with yours) ought to be 100%. Accordingly, in relation to the error confronted by you, kindly make sure you fill the Schedule HP with all of the above talked about particulars and make sure that the full of all possession proportion equals 100%.


I had initiated a life stage pension coverage with ICICI Prudential Insurance coverage Firm in 2008 by paying 1 lakh premium for 10 years. The coverage matured in 2018 however I didn’t vest the fund worth then due to my uncertainty in regards to the tax implications. Based on the phrases of the coverage doc, I can get 1/third of the fund worth tax-free in my funds and the remaining should be invested in an annuity coverage, which delivers low returns now. What’s the tax implication if I vest the complete fund worth in money in my palms now? If there are any tax liabilities, will solely the fund appreciation over and above my 10 lakh contribution with indexation be taxable? How a lot tax is to be levied?

—R.Ok. Bhattacharya


We assume from the details supplied that the life stage pension coverage held by you with ICICI Prudential Insurance coverage Firm is within the nature of a personal pension coverage and never a life insurance coverage coverage. We’ve assumed that the fund arrange by ICICI Prudential Insurance coverage Firm is beneath a pension scheme authorised by the Insurance coverage Regulatory and Improvement Authority of India (Irdai) for the aim of receiving pension.

As per the provisions of the revenue tax legislation, any cost obtained in commutation of pension obtained from an authorised fund (not beneath a scheme of the employer) is totally exempt from tax.

Accordingly, in case you suggest to commute the complete fund worth in money now, the complete sum obtained by you have to be exempt from tax in your palms. Nevertheless, that is topic to permissibility of such greater commutation beneath the coverage phrases.

Parizad Sirwalla is companion and head, international mobility providers, tax, KPMG in India.

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