Tax implications in the hands of legal heir for disputed pension
Hi, all. My question is An government employee Was receiving Pension after the retirement Which was very less As there was dispute with dept to it , So after his death, the pension disputed was given to the legal hair Apart from the family pension, which she is receiving. So, how will be the tax implications occur on this disputed pension to the legal heir?
Replies (4)
Quick Summary
It is taxable.
Thanks For the reply sir.
You are welcome.
Pension arrears received by legal heirs:
• If a government pensioner died and pension arrears or excess payments are received by the heirs, the arrears relating to the deceased's lifetime are the deceased's income (assessable through the legal representative, Sec 159). For the heirs, it's a capital receipt (inheritance), not their income.
• Family pension (after death) is the spouse's income (Other Sources, with 57(iia) deduction).
• Excess pension paid after death (recovered by the department) isn't anyone's income.
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