A retired person who does not receive pension from the Company but the company has invested the corpus Contributory Pension of the employee (self contributory and Company contribution under defined benefit) in an annuity of LIC from which the person gets monthly annuity can be termed salary/pension?
Further, if the retired person invests from his retirement corpus to purchase annuity from LIC and gets monthly annuity whether this also is termed as salary/pension?
If so can the Standard deduction of Rs.40000.00 announced for FY 2018-19 in the budget be claimed by the person.
Further, what is the deduction for interest earned from SB accounts and FDs in banks/ companies for persons below 60 years for the FY 2018-19.
Any annuity or pension is considered as salary income for the taxation purpose. Hence, such pensioner or the person who receive annuity can claim the standard deduction of Rs.40,000.
A deduction of up to Rs.10,000 can be claimed by an individual or HUB in respect of any income by the way of interest on deposits (not on FDs) in a savings account with a bank, co-operative society or post office (irrespective of the age of the tax payer) (Under Sec.80TTA).
Senior Citizens interest income earned from Bank FDs, RDs (including Post Office), will be exempt up to Rs.50,000 under Sec.80TTB.