Hi -
My mother is a widow and gets pension from Central Government on account of my fathers death. How is tax calculated on pension income to a widow ?
Pension including family pension paid to widows and widowers is treated as salary for taxation purposes.
Sub Section iia of Section 57 of Incometax Act, 1961 states as follows:
[(iia) in the case of income in the nature of family pension, a deduction of a sum equal to thirty-three and one-third per cent of such income or 11[fifteen] thousand rupees, whichever is less.
Explanation.For the purposes of this clause, family pension means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death ;]
So after deduction of 1/3rd of the family pension (subject to a maximum of Rs. 15,000 per month), if the annual income exceeds the limits laid down for ladies, then only, your mother has to pay tax.
Please refine your question if you have any further doubts.
A small correction to my previous reply on the subject.
While pension is treated as salary, family pension paid to widows will be treated as income from other sources. 1/3rd of family pension (subject to Rs. 15,000 limit) will be allowed as deduction and only the balance counted for taxation limits.
First 1,80,000 of the total Indian income of a woman is not taxable. Beyond that tax is payable @ 10%.
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