Pension

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2015 1. Person ‘A’ is a state Govt retired employee. Did not receive pension benefits at the time of retirement in 1992 due to departmental proceedings against him. He expired in April, 2013.
2. Person ‘B’ is wife of ‘A’. She received the pension benefit of ‘A’ in June, 2015, being the legal heir of “A”. Amount received Rs. 13.5 lakhs.
3. Person ‘C’ ‘ D’ and ‘ E’ are the three sons/daughters of ‘A’ and ‘B’.
4. Person ‘F’ ‘G’ ‘H’ and ‘I’ are the four grandsons/ grand daughters of ‘A’ and ‘B’.
Now the following points needs clarification
1. After deducting the exemption limit of Rs. 3 lakhs, ( “B” is a senior citizen- Age is 70) whether the remaining amount of Rs. 10.5 lakhs ( pension benefits of her husband)is taxable at the hands of ‘B’ in the financial year 2015-16(Assessment year 2016-17). If so what is the time limit for paying Income tax.
2. IN case, the said Rs 10.5 lakhs is given as gift -Rs. 3.5.lakhs each- by ‘B’ to ‘C’ ‘ D’ and ‘ E’ ’ whether the said amount of Rs. 3.5 lakhs is taxable at the hands of ‘C’ ‘ D’ and ‘ E’. If taxable whether, ‘C’ ‘ D’ and ‘ E’ can avail the benefit of exemption up to Rs. 2.5 lakhs.
3. Alternatively, assume that the said Rs. 10.5 lakgs is given as gift – Rs. 1.5 lakhs/- each by ‘B’ to ‘C’ ‘ D’ ‘ E’ ‘F’ ‘G’ ‘H’ and ‘I’ (being a close relative ), whether all the seven persons viz., C’ ‘ D’ ‘ E’ ‘F’ ‘G’ ‘H’ and ‘I’ can avail tax exemption, since the amount received as gift is Rs. 1.5 lakhs which is well below the exemption limit of Rs. 2.5.lakhs .

Note :-
1.) ‘ C’ is a IT assessee and ‘ D’ and ‘ E’ are non assessee,having income below 2.5 lakhs in 2015-16 , ‘F’ and ‘G’ are above 18 years of college student without any personal income and ‘H’ and ‘I’ are below 18 years of school student, without any personal income.
2). Normally pension benefits of Govt servant is not taxable . However any income accrued on the pension benefits is liable to IT in normal course.

Rupesh Jain

Rupesh Jain (Expert)
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24 June 2015 amount of A period recd. by his wife is exempt in hand of wife.
and after expire period of A, pension amount will be taxable In wife hand under the income from other sources.