20 June 2018
Sir I want to know whether the family pension recieved by my client after her husband's death. The whole amount received is taxable or some rebate is there? Pl guide. Regards
24 July 2024
Family pension received by a widow after her husband's death is taxable under the Income Tax Act. Here are the key points regarding the taxation of family pension:
1. **Taxability of Family Pension:** - Family pension received by the widow is considered as income and is taxable under the head "Income from Other Sources" in her hands.
2. **Deduction Allowed:** - A standard deduction of Rs. 15,000/- or 1/3rd of the family pension amount, whichever is less, is allowed under Section 57(iia) of the Income Tax Act. This deduction is applicable to any kind of family pension.
3. **Exemption for Disability Pension:** - If the deceased husband was a defense personnel and the family pension includes any disability pension, such disability element is exempt from tax under Section 10(18) of the Income Tax Act.
4. **Taxation of Ordinary Family Pension:** - The remaining portion of the family pension, after considering the above deduction and any exemption for disability pension, if applicable, is taxable as per the widow's income tax slab rates.
5. **Filing of Income Tax Return:** - The widow needs to include the total amount of family pension received (after deducting Rs. 15,000/- or 1/3rd of the pension amount) in her Income Tax Return (ITR) under the head "Income from Other Sources."
6. **Consultation with Tax Advisor:** - It's advisable for your client to consult with a tax advisor or a chartered accountant who can provide personalized advice based on the specific details of the family pension received and ensure accurate tax compliance.
In summary, while family pension received by the widow is taxable, she can avail of a standard deduction to reduce the taxable amount. Any disability pension component within the family pension may be exempt from tax, depending on the circumstances.
CAclubindia
