No tax if income is below the basic exemption limit
Family pension paid to the family members of the deceased gets totally exempt if it was employed with central or state government and had received specified gallantry awards
My sister's husband has expired, she is receiving family pension. So in the accounting year 2019-2020 how much deduction can she claim?
Taxability of family pension under the Income-tax Act, 1961 (Act) is dependent on the employment of the deceased person. Family pension paid to the family members of the deceased gets totally exempt if it was employed with central or state government and had received specified gallantry awards. Also, family pension received by the widow of a member of armed forces, who died in the course of operational duties under specified circumstances and situations, gets exempt.
However, if the deceased was employed with an employer other than the above mentioned institutions, family pension shall be taxed as the 'income from other sources' under section 56 of the Act and only a deduction of 33.3% of the amount of such income or Rs 15,000 whichever is less, shall be allowed while taxing the income.
However, in case, the total income of your sister consisting of family pension along with the other income is below the basic exemption limit of tax, no tax shall be required to be paid.
Chirag Nangia, Director, Nangia Advisors (Andersen Global)
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