ITR Filing: If pension is late deposited, in which year should I mention it?

I assume that pension is in respect of services rendered by you in the past such as pension received from previous employer or retirement purchased from EPFO ​​or by your employer. Such pension is treated at par with salary and is taxed under the head “Salaries”. Salary becomes taxable on the first accrual or receipt. Hence advance salary becomes taxable even if not payable and vice versa means salary which has become due but not yet received become taxable even if not received. Hence the pension though accrued in the subsequent year, had already become payable in the earlier year and hence became taxable in the year to which it pertained. Therefore, pension received late by one year has to be presented to tax in the year in which it is made. Please note that it is not taxed again when it is received.

If the pension is a family pension, which is received by a family member of the person entitled to receive the pension because there is no employee-employer relationship between the family members of the deceased and the employer, it shall be deemed to be “income” under the head “Income”. taxed under. from other sources. In respect of income taxable under the heads “Profits and gains of business of profession” and “Income from other sources”, the taxpayer has the option to present it to tax on accrual or receipt basis. So it becomes taxable on the same basis on which it was introduced for tax in the past. If you have included it in your income in the year of receipt in the past, you can include it in the income of the next year otherwise you have to show the year to which it relates.

Balwant Jain is a Tax and Investment Specialist and can be reached at jainbalwant@gmail.com and @jainbalwant on Twitter.