Hello Sir,
I want clarification regarding Family Pension (deduction u/s 57)
My father was expired on 10 January 2010 after his retirement on 2008 from BSNL.
So onwards my mother is getting family pension approx. 24,000.00 per month (24,000.00- x 12 = 288,000.00).
So as per Deduction u/s 57, should we take deduction of Rs. 15,000.00 or 1/3rd of monthly pension (whichever is less)
I.e. = Rs. 7,999.20 p.m.?
Total annual income = Rs. (24,000.00- 7,999.20) X 12 = Rs. 192,009.60
Example:
Pension : 192,009.60
(a) Deduction under 80C : 100,000.00 (Saving under PPF)
(b) Deduction under 80TTA : 7,640.00 (SB Account Interest)
Deduction Total (a+b) : 107,640.00
Total Income : -84,369.60
Discount for Woman : 200,000.00
Taxable Income : -115,631.00
Taxable Amount : Nil
Is above my calculation correct?
And I recently downloaded pdf file from Income Tax website
Tax Payers Information Series 31
Taxation of Salaried Employees Pensioners and Senior Citizens
CHAPTER-9
PENSIONERS & SENIOR CITIZENS
.2 FAMILY PENSION
Family pension is defined in Section 57 as a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of death. Pension and family pension are qualitatively different. The former is paid during the lifetime of the employee while the latter is paid on his death to surviving family members. However, in case of family pension, since there is no employer-employee relationship between the payer and the payee, therefore, it is taxed as ‘Income from Other Sources’ in the hands of the nominee(s). In respect of family pension, deduction u/s 57(iia) of Rs.15000 or 1/3rd of the amount received, whichever is less, is available
So will family pension comes under ‘Income from Other Sources’ ?
If then should we use ITR 2?
Please let me know
Thank you
Narayan
CAclubindia
