Mr. X retired from a Pvt. Ltd. Company. The company paid ₹ 80,000 in lieu of commutation of 25 percent…

For a non-government employee who does not receive any gratuity, the commuted value of up to one-half of the pension is exempt (formerly section 10(10A)(ii) of the Income-tax Act, 1961; the exemption continues under the Income-tax Act, 2025). Commuting 25 percent of the pension for ₹80,000 implies a full commuted value of ₹3,20,000, so up to ₹1,60,000 is exempt. The whole ₹80,000 is therefore exempt and the taxable commuted pension is 'Nil'.