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Tax on Family Pension

05 April 2023

My Mother worked as a teacher in a state government schooland got retired recently. She is receiving her pension. Recently my Father died and my Mother started receiving the family pension in addition to her own pension. Is Family pension taxable or tax-exempt ?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (172511 Points)
Replied 05 April 2023

Family Pension is taxable after allowing a deduction of 33.33% or Rs. 15000, whichever is less.

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Manigandan (39 Points)
Replied 05 April 2023

Hello Sir,

Thanks for your quick reply. Can you please let me know the Income tax Section that is applicable here ?.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (172511 Points)
Replied 05 April 2023

What is Family Pension?

Family pension is defined in Section 57 as a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of death. Pension and family pension are qualitatively different. The former is paid during the lifetime of the employee while the latter is paid on his death to surviving family members. However, in case of family pension, since there is no employer-employee relationship between the payer and the payee, therefore, it is taxed as ‘Income from Other Sources’ in the hands of the nominee(s). In respect of family pension, deduction u/s 57(iia) of Rs.15000 or 1/3rd of the amount received, whichever is less, is available.