Pension Commutation Calculator (India, Central Government)

About the Pension Commutation Calculator (India, Central Government)

A Central Government pensioner may commute — exchange for a lump sum — up to 40% of the pension. The lump sum is the commuted pension × 12 × the commutation value for your age next birthday, from the table of the CCS (Commutation of Pension) Rules: 8.194 at age 61 — the age next birthday of someone who retires at 60. The pension is reduced by the commuted part, which is restored after 15 years; dearness relief stays on the full pension, and the family pension is not reduced (DoPPW handbook).

Enter your basic pension, the share to commute, your date of birth and retirement, and when you applied. The calculator finds your age next birthday on the day commutation becomes absolute, applies the official table — bundled with the page from the Department of Pension & Pensioners’ Welfare — and shows the lump sum, the pension you keep, what you get in hand with dearness relief, the date the full pension returns, what the lump sum costs you as an interest rate, and the tax. State Government and other pensioners can enter the factor from their own table. Everything is worked out in your browser.

The formula and the table

Under rule 8 the lump sum is worked out with the Table in force on the date commutation becomes absolute, for your age on your birthday next after that date: lump sum = commuted pension a month × 12 × commutation value. The commuted pension is the share you choose of your pension, at most 40%, with any fraction of a rupee left out (rule 5). The Table gives the value of a pension of ₹1 a year — from 9.188 at age 20 to 4.611 at 81; 8.287 at 60, 8.194 at 61 and 8.093 at 62 — on the basis of LIC (94-96) Ultimate Tables and 8% interest. The whole table is under the calculator.

When commutation becomes absolute

• Applied before retiring: Form 1-A, reaching the Head of Office at least three months before superannuation — absolute on the day after you retire, and the lump sum is authorised with the pension payment order.
• Applied after retiring: Form 1 — absolute on the day the Head of Office receives it, which must be within one year of retirement for commutation without a medical examination.
• Later than that: apply in Form 2 and undergo a medical examination; the medical authority may add years to your age, which lowers the lump sum (rules 6 and 13).

After commutation

Your monthly pension is reduced by the commuted part from the day the reduction becomes operative. Under rule 10A the commuted part is restored on completion of 15 years from that day. Dearness relief continues on the full basic pension, and if you die the family pension is not reduced on account of the commutation (DoPPW handbook).

Tax

Section 19(1) of the Income-tax Act, 2025 (Table, Sl. No. 7) deducts the entire commuted value received under the Civil Pensions (Commutation) Rules of the Central Government or a similar scheme of the civil, defence, State and local-authority services — so it is not taxed. Pensioners of other employers get the commuted value of up to a third of the pension tax-free if they also receive gratuity, or up to a half if they do not (Sl. No. 8). The monthly pension itself is taxed as salary.

Limitations

• The Central Government table applies to pensioners under the CCS (Commutation of Pension) Rules. State Governments and other employers have their own tables and rules: choose your own table and enter its value.
• Restoration is shown 15 years after the date commutation becomes absolute; it runs from the day the reduction became operative, which can be later when the lump sum is paid later.
• An age added by a medical examination, commutation of a provisional pension and later revisions of the pension are not covered.
• Your Accounts Officer authorises the actual amount.

Privacy

Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.