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Are state government individual, family pensions exempted.

gunturboy26 (Self Employed) (217 Points)

27 December 2015

Are individual and family pensions given by state government are exempted from income tax? If a woman recieves both her pension and her deceased husband's pension. What exemptions are given?

Thank you.

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10 Replies

S. Shiroor (Others) (1207 Points)
Replied 27 December 2015

There is no Exemption for Pension. If it is above taxable limit for senior citizen then you have to file return.

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gunturboy26 (Self Employed) (217 Points)
Replied 27 December 2015

Thank you for the reply Shiroor.

So, no kinds of exemptions apply to pensions? What about family pension?

gunturboy26 (Self Employed) (217 Points)
Replied 28 December 2015

Anybody else who could give me information.

Any kinds of exemptions available for pensions apart from 3 lac rupees senior citizen exemption?

Ankit Taprania (CA FINAL ) (542 Points)
Replied 29 December 2015

Well , there are two categories of pension :

1. Uncommuted pension (pension received in regular instalments ) this is FULLY TAXABLE for all kinds of employees .

2. Commuted pension ( lumpsum payment instead of paying in installment ) this is exempted in following manner based on the type of employee U/S 10(10A)

(a) Govt employees - FULLY EXEMPT

(b) Non-Government Employee :

if employee also receives gratuity – 1/3 of Commuted value of pension

if employee not receives gratuity – ½ of Commuted value of pension

Commuted value of pension = Pension received / % of pension commuted

If pension is partly commuted and partly uncommuted then each portion’s exemption is calculated accordingly.

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gunturboy26 (Self Employed) (217 Points)
Replied 30 December 2015

Thanks for the information Ankit.

The pensioner receives her pension and her deceased husband's pension every month, so is this uncommuted pension? so she should pay income tax on both the pensions?

S. Shiroor (Others) (1207 Points)
Replied 30 December 2015

Family pension is taxable as income from other sources and a standard deduction of 1/3rd of pension or Rs 15,000 whichever is less is allowed.

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Ankit Taprania (CA FINAL ) (542 Points)
Replied 30 December 2015

YES , both the pension are uncommuted pension .

1 . her own pension is taxable U/H salaries - fully taxable

2. her husband pension ( family pension ) taxable U/H income from other sources - and from this exemption of 33.33% or 150000 which ever is less is available U/S 57

HOWEVER tax is payable if total income exceeds basic exemtion limit .

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gunturboy26 (Self Employed) (217 Points)
Replied 30 December 2015

Thanks for the information Shiroor and Ankit.

So, the pensions are taxable and apart from the senior citizen exemption of 3 lacs, she does not have any other exemption and she has to pay income tax.