Key Points
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has exempted an non-resident Indian (NRI) from paying any income tax on gains made on surrender of pension policy bought from ICICI Prudential Life Insurance Company..
Section 80CCD (2) provides that any amount received on account of surrender of the annuity plan or as pension received from the annuity plan would constitute deemed income provided the taxpayer has claimed a deduction for contribution to such annuity plans/ pension funds in the previous years...
The key point is 'if only' a taxpayer claims deduction under section 80CCC then only proceeds from surrendered pension policy can be charged as income under section 80CCD (2)...
Since the assessee had not claimed any deduction under section 80CCC, she was entitled to claim complete tax exemption under section 10(10A) for commutation of pension received," says Surana...
Section 10(10A) provides for exemption of income in the case when commutation of pension if received from a fund referred to under section 10(23AAB) is exempt from tax...
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