Paragraph match score 80.7%
Page A-684
Is a Commuted Pension Taxable?
Pension received without gratuity: 50% of your commuted pension is exempted from income tax.
Page A-738
Taxability of Commuted and Uncommuted Pension
If you do not work for a government body or corporation, you will be taxed as follows: If you receive gratuity along with your pension, the tax exemption is equal to one-third of the commuted pension. If you do not receive gratuity along with your pension, the tax exemption is equal to one-half of the commuted pension.