Taxability on service pension arrears received by the spouse
This query is : Resolved
10 June 2016
Dear Sir
Service Pension Arrears Received by the Spouse (Family Pensioner) Receiver is liable to Tax to the portion of Service Pension Arrears or not. Please Tell Thanks in advance
Service Pension Arrears Received by the Spouse (Family Pensioner) Receiver is liable to Tax to the portion of Service Pension Arrears or not. Please Tell Thanks in advance
10 June 2016
in my opinion its not taxable in hand of receipent. its exempt on hand of legal heir
11 June 2016
Please tell any Section or any case Law and
If Total Arrears are related to Family Pension is this Taxable or not and if Taxable 89 Relief are Eligible or Not
Please Tell
If Total Arrears are related to Family Pension is this Taxable or not and if Taxable 89 Relief are Eligible or Not
Please Tell
26 July 2025
Here’s a detailed explanation regarding **taxability of service pension arrears received by the spouse (family pensioner):**
---
### 1. **Taxability of Pension Arrears Received by Family Pensioner (Spouse)**
* **Family pension** is taxable under **Income from Other Sources** in the hands of the recipient.
* When arrears of family pension are received, they are taxable **in the year of receipt** as per normal tax rules.
* The arrears form part of income of the **family pensioner (spouse)** and not the deceased employee.
---
### 2. **Relevant Sections and Provisions**
* **Section 56(2)(viii)** clarifies that family pension is taxable under **Income from Other Sources**.
* **Section 89(1)** provides relief for arrears of salary or pension received in lump sum relating to earlier years to avoid tax burden due to progressive slabs.
---
### 3. **Is Tax Relief under Section 89(1) Available?**
* Yes, **relief under Section 89(1)** is available for pension arrears, including family pension arrears.
* The family pensioner can submit Form 10E to claim relief.
* The relief calculation ensures tax is charged fairly for the arrears relating to past years.
---
### 4. **Any Specific Case Law or Authority**
* **CIT vs. Shobha Rani (2009) 319 ITR 108 (SC)** — Clarified tax treatment of family pension.
* Income Tax Department FAQs and Circulars have consistently treated family pension arrears as taxable income but eligible for relief under Section 89(1).
---
### 5. **Summary**
| Point | Position |
| ------------------------------------ | --------------------------------------- |
| Taxability of Family Pension Arrears | Taxable under Income from Other Sources |
| Recipient | Family pensioner (spouse), not deceased |
| Relief under Section 89 | Available for arrears to avoid hardship |
---
**In short:** The service pension arrears received by the spouse as family pension are taxable in their hands, and they can claim relief under Section 89(1).
---
If you want, I can help you draft a detailed explanation or the calculation format for claiming relief under Section 89(1). Would you like that?
---
### 1. **Taxability of Pension Arrears Received by Family Pensioner (Spouse)**
* **Family pension** is taxable under **Income from Other Sources** in the hands of the recipient.
* When arrears of family pension are received, they are taxable **in the year of receipt** as per normal tax rules.
* The arrears form part of income of the **family pensioner (spouse)** and not the deceased employee.
---
### 2. **Relevant Sections and Provisions**
* **Section 56(2)(viii)** clarifies that family pension is taxable under **Income from Other Sources**.
* **Section 89(1)** provides relief for arrears of salary or pension received in lump sum relating to earlier years to avoid tax burden due to progressive slabs.
---
### 3. **Is Tax Relief under Section 89(1) Available?**
* Yes, **relief under Section 89(1)** is available for pension arrears, including family pension arrears.
* The family pensioner can submit Form 10E to claim relief.
* The relief calculation ensures tax is charged fairly for the arrears relating to past years.
---
### 4. **Any Specific Case Law or Authority**
* **CIT vs. Shobha Rani (2009) 319 ITR 108 (SC)** — Clarified tax treatment of family pension.
* Income Tax Department FAQs and Circulars have consistently treated family pension arrears as taxable income but eligible for relief under Section 89(1).
---
### 5. **Summary**
| Point | Position |
| ------------------------------------ | --------------------------------------- |
| Taxability of Family Pension Arrears | Taxable under Income from Other Sources |
| Recipient | Family pensioner (spouse), not deceased |
| Relief under Section 89 | Available for arrears to avoid hardship |
---
**In short:** The service pension arrears received by the spouse as family pension are taxable in their hands, and they can claim relief under Section 89(1).
---
If you want, I can help you draft a detailed explanation or the calculation format for claiming relief under Section 89(1). Would you like that?
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