How much Family Pension deduction is permitted in Income Tax law?

[Anonymous]

I have heard that there is some standard deduction permitted under Income Tax law for the family pension. But nobody tells me for sure. My mother has started getting family pension about 9 months back and I have to get her Income Tax Return prepared. The accountant whom I contacted knows about business income but not about family pension income. Please advise me how much deduction is permitted for family pension income. If no such deduction is permitted then also please guide me.

[Dr. Ashok Dhamija]

Family pension is taxed under Section 56(1) of the Income Tax Act. This section provides that “Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income tax under the head “Income from other sources”, if it is not chargeable to income tax under any of the heads specified in Section 14, Items A to E”. Now, since “family pension” is not included in any of these heads specified in Section 14, Items A to E, therefore, “family pension” is taxed under Section 56 as “Income from Other Sources”.

In view of the provisions of Section 57(iia) of the Income Tax Act, in respect of income due to “family pension”, a deduction of a sum equal to thirty-three and one-third per cent of such income (i.e., one-third of such income) or Rs. 15000, whichever is less, is allowed from such income.

See some more replies related to family pension:

• Is Income Tax payable on Family Pension received by a widow
• Family pension to unmarried daughter of more than 25 years age
• Family pension of a defence officer
• Is TDS for income tax deducted on family pension?

 

     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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