The facility to commute pension is available to employees of the government of India. While civilian employees can withdraw up to 40 per cent of their pension, defence personnel can go up to 50 per cent into a lump sum payment and are exempt from tax. You should commute only if you need the lump sum to pay off or use towards any pressing financial goal or need. If not, do not commute and instead receive a full pension. Remember, once commuted, your regular pension will be that much less, which you should factor in before you decide to commute.