25 June 2018
With regard to family pension being received by widow and minor son under Employee Pension Scheme 95, 1. Whether it should be declared in IT return under "income from other sources" 2. Whether the widow can claim standard deduction of Rs. 15000/- 3. As the minor income is to be clubbed in mother's income, whether another Rs 1500/- can be deducted from minor income ( As Minor income above Rs 1500 only is reported as taxable) 4. Whether the above deductions , Rs 15000/- and Rs 1500/- to be shown under Exempted income in ITR2
26 June 2018
Thanks a lot Mr Warrier. Referred the Section 57 (iia) advised by you. It is expressly mentioned that "For the purposes of this clause, "family pension" means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death ". Whether the family pension under Employee Pension Scheme 1995 is considered as "family pension" for claiming the deduction of Rs 15000/-. If considered, is it sufficient to include the total pension amount minus Rs 15000/- as income. Or Rs 15000/- is to be declared under exempted income portion of ITR2. Again thanking you for your efforts in educating us. Regards Ramadurai
24 July 2024
Regarding the queries related to family pension under the Employee Pension Scheme 1995:
1. **Declaration in IT Return under "Income from Other Sources":** - Yes, family pension received by the widow and minor son should be declared under the head "Income from Other Sources" in your Income Tax Return (ITR).
2. **Claiming Standard Deduction of Rs. 15,000/-:** - The standard deduction of Rs. 15,000/- is applicable to any income received under the head "Income from Other Sources," which includes family pension. Therefore, the widow can claim this standard deduction.
3. **Deduction for Minor's Income:** - As per the Income Tax Act, minor's income (such as the son's share of the family pension) is clubbed with the income of the parent whose income is higher. Only up to Rs. 1,500 of the minor's income is exempt from clubbing provisions. - If the minor's income exceeds Rs. 1,500, you cannot deduct an additional Rs. 1,500 from the minor's income. The exemption is limited to Rs. 1,500 or the actual minor's income, whichever is less.
4. **Exempted Income in ITR2:** - The standard deduction of Rs. 15,000/- for family pension received by the widow and any exemption of Rs. 1,500 for the minor's income (if applicable) should be shown under "Exempt Income" in the relevant schedule of ITR2.
**Regarding the deduction of Rs. 15,000/-:** - Family pension received under the Employee Pension Scheme 1995 is considered "family pension" for claiming the deduction of Rs. 15,000/-. - You need to include the total amount of family pension received minus Rs. 15,000/- as income in the respective schedule of ITR2.
**Note:** It's advisable to consult with a tax advisor or chartered accountant to ensure accurate compliance with tax laws and to handle specific nuances of your tax filing related to family pension and minor's income. They can provide personalized advice based on your exact situation and the specific provisions of the Income Tax Act applicable to you.
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