INCOME TAX

Commutation of pension received by Judges of the Supreme Court and High Courts--Applicability of section 10(10A)(i) of the Income-tax Act, 1961

Circular No. 623

Dated 6/1/1992

Under section 10(10A)(i) of the Income-tax Act, 1961, any payment in commutation of pension received, inter alia, under the Civil Pension (Commutation) Rules of the Central Government, shall not be included while computing the total income of the recipient.

2. The issue regarding the applicability of section 10(10A(i) to the computation of pension received by Judges of the Supreme Court and the High Courts has been considered by the Board. The Board have been advised that under section 19 of the High Court Judges (Conditions of Service) Act, 1954, and the corresponding provisions in the Supreme Court Judges (Conditions of Service) Act, 1958, the Civil Pension (Commutation) Rules for the time being in force shall, with necessary modifications, apply to Judges. The Board are further advised that the Judges would be governed by rule 3 of the Civil Pension (Commutation) Rules, which provide for commutation for a lump sum portion not exceeding one-half of the pension. Since the commutation is under the aforesaid Rules, Judges of the Supreme Court and High Courts will be entitled to the exemption of the commuted portion under section 10(10A)(i) of the Act.

(Sd.) Keshav Dev,

Deputy Secretary to the Government of India.