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Salary or pension received by ex gratia

26 August 2021

salary or pension received by widow per month in case of on duty death of her husband.

is this amount is taxable???

if taxable then in which head???

if exempt then in which section this is exempt???

plz clarify

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11 Replies

Abhishek Purohit (52 Points)
Replied 26 August 2021

It will be fully exempt
(Circular No. 573, dated 21-08-1990]

PARVEEN DAHIYA (181 Points)
Replied 27 August 2021

Thanku sir @ abhishek

I have requirement of form 16 and Income tax return for some purpose.

in this case form 16 should be issued???

if I filed income tax return then where I should show this salary or pension ???

Abhishek Purohit (52 Points)
Replied 27 August 2021

Sorry ,I couldn't answer that as I am unaware of the technicalities.

Other members may help you.

PARVEEN DAHIYA (181 Points)
Replied 27 August 2021

Plz anyone help me. no one answered. plz request to experts plz help me

Pramod Limaye (Chartered Accountant) (172 Points)
Replied 28 August 2021

Circular No. 573, dated 21-08-1990 speaks about lump sum payment by the employer to the legal heir of deceased employee and it is exempt from tax. However, the circular is silent about salary or pension every month to the widow of deceased employee. It may not be taxable in the hands of widow since there is no relationship of employer and employee between the company and widow of the deceased employee. But this monthly payment might get disallowed as it cannot be said for the purpose of business.

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PARVEEN DAHIYA (181 Points)
Replied 28 August 2021

Is it taxable income in the hands of widow???

Pramod Limaye (Chartered Accountant) (172 Points)
Replied 28 August 2021

I have clarified my view above, that it may not be taxable in the hands of widow since there is no relationship of employer and employee between the company and widow of the deceased employee. But at the same time, this monthly payment might get disallowed for the company as it cannot be said for the purpose of business. It will not be possible to prove the necessity of the expenditure for the purpose of business.

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PARVEEN DAHIYA (181 Points)
Replied 28 August 2021

Ok thanku sir.

can we say it's family pension???

Pramod Limaye (Chartered Accountant) (172 Points)
Replied 28 August 2021

No. You cannot say it Family Pension. It is called Ex-Gratia only. However, as said earlier, it is likely to get disallowed for the Company.

Abhishek Purohit (52 Points)
Replied 28 August 2021

Sorry ,my mistake , didn't noticed the word salary or pension
Thank you Pramod sir for clarification

PARVEEN DAHIYA (181 Points)
Replied 29 August 2021

I discussed with a senior chartered accountant. he told me to show in other sources with exempt income with reference to circular number of 573 dated 21-08-1990.

it is fully exempt.

and show her other taxable income in other heads.

thanku everyone.

reply if above treatment is wrong.