What Are The Types Of Pension Exempt From Tax?

Whether pension received by gallantryaward holder is taxable as per Income Tax Act. Somya Krishnan,Kochi

Yes, pension received by

gallantry

award holder is tax free , but the types of award is also notified. Section 10(18) of the I T Act provides exemption for such gallantry award winner and even to the family

pension

received by member of the fa

mily

of gallantry winner. Read the

provision

below :

18) any income by way of—

(i) pension received
by an individual who has been in the service of the Central Government or State Government and has been awarded “Param Vir Chakra” or “Maha Vir Chakra” or “Vir Chakra” or such other gallantry award as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(ii) family pension received by any member of the family of an individual referred to in sub-clause (i).

The notified Gallantry awards can be found here.

The meaning of family is given in Explanation under clause 5 of section 10 which is as under

For the purposes of this clause, family, in relation to an individual, means
(i) the spouse and children of the individual ; and(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual;

Is there any other tax free pension ?

Yes, clause 19 of section 10 provides that pension received by widow or children of members of armed forces who dies in course of dutiesare tax free. Readthe provision

(19)family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the Union, where the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed;

What are the prescribed circumstances?

Inserted by the Income-tax (Fourth Amendment) Rules, 2005,w.e.f. 9-2-2005.

2BBA.(1) For the purposes of clause (19) of section 10, the circumstances of death of a member of the armed forces (including paramilitary forces) of the Union in the course of operational duties shall be the following, namely:—

(i) acts of violence or kidnapping or attacks by terrorists or anti-social elements;

(ii) action against extremists or anti-social elements;

(iii) enemy action in international war;

(iv) action during deployment with a peace keeping mission abroad;

(v) border skirmishes;

(vi) laying or clearance of mines including enemy mines as also mine sweeping operations;

(vii) explosions of mines while laying operationally oriented mine-fields or lifting or negotiation minefields laid by the enemy or own forces in operational areas near international borders or the line of control;

(viii) in the aid of civil power in dealing with natural calamities and rescue operations;

(ix) in the aid of civil power in quelling agitation or riots or revolts by
demonstrators.

(2)It shall be certified by the Head of the Department where the deceased member of the armed forces(including paramilitary forces) last served, or the service headquarters, as the case may be, that the death of such member has occurred in the course of operational duties in circumstances mentioned in sub-rule (1).