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Posted Mon, 07 Aug 2023 17:47:49 GMT by
I have been a govt employee in India and now working in the UK for last one year after retiremtn. On retirement, a govt employee receives monthly pension, one time gratuity, leave encashment and comunted pension. All these amounts, other than monthly pension, are tax free in India. As I am a UK tax resident, I want to understand are the tax implications for me in the UK. In one of the threads, I read the following comments: "Under Article 20, the full amount would be taxable in the UK if it is not a government pension." Does this mean the pensionary income is taxable in India only and tax free in the UK. Article 20(1) says the following: Any pension, other than a pension referred to in Article 19(2) of this Convention, or annuity paid to a resident of a Contracting State shall be taxable only in that State. As other pensionary benefits are accrued due to working in India and depends on each year worked and there is special income tax exemptions for all such amount. I want to understand if the amount will be tax free under sec 20(1)? Thanks!
Posted Fri, 11 Aug 2023 10:04:41 GMT by HMRC Admin 25 Response
Hi rajiv,
Article 19(2) of the UK / India double taxation agreement, advises that any pension paid by the Government of India to any individual in respect of services rendered to that Government, shall be taxable only in India.  
Article 20 would relate to other pensions that are not government pensions.
2020 UK-India Synthesised text of the Multilateral Instrument and the 1993 Double Taxation Convention — in force
Thank you. 

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