LN 262 of 2016 refers to the exemption from income tax applicable to the commutations of pensions.
Rule 3 of the said LN prescribes that the total amount of capital sum received by way of scheme which is exempt from income tax shall amount to 30% of the total pension. The rules apply irrespective of whether the said capital sum is paid as one lump sum or in a series of tranches within one year from retirement date as prescribed under the Retirement Pensions Act, including any regulations or Pension Rules issued thereunder.
The retirement scheme administrator shall provide the Commissioner with the information in its possession regarding sums paid to a member of a recognised retirement scheme as the Commissioner may require for the purposes of the administration of these rules.
