This post is on account of the question received in my mail ” I am the widow of a Lt. Col. in the Indian Army.I currently receive Special Family Pension as per the PPO for husband’s service. He was in service while we passed away due to health reasons.Is my special family pension taxable? if not, Do I still need to file ITR each year?”
Let us first know about Special Family Pension. It is admissible if the death or disability of an officer whether during service or after retirement is caused due to the circumstances mentioned in category ‘B’ or ‘C’ . Families of commissioned officers and PBOR whose death is regarded as attributable to or aggravated by military service, are granted special family pension.
What is Category B Circumstances?
Death or disability due to causes which are accepted as attributable to or aggravated by military services such as diseases contracted because of continued exposure to hostile work environment subject to extreme weather conditions or occupational hazards
What is Category C Circumstances?
Death or disability due to accidents while performing duty, such as,
- Accidents while travelling on duty in Government/public /private vehicles or during air journey or mishap at sea.
- Electrocution while on duty.
- Accidents during participation in organized sports events/ adventures activities/expeditions/training
Is Special Family Pension Taxable Under Income Tax Act ?
The normal pension is taxable as Salary and normal family pension is also taxable as income from other sources u/s 56 of the Income Tax Act. However , there is an express provision under Section 10(19) of the Income Tax Act introduced from assessment year 2005-06 provides that amount of pension received by the family members of armed forces personnel including Para-,military personnel who dies in certain circumstances in course of performing his /her duties, shall be tax free .The excerpt of the provision of law is given below :
10(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 paramilitary 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 conditions?
Section 10(19) speaks of exemption of family pension when the death of Armed Forces or Para-Military personnel – has occurred in the course of operational duties in certain Circumstance which is prescribed in Rule 2 BBA
(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.
Certificate from Head of Department
As per Rule 2BBA (2), special family pension is exempt only when a certificate is issued by the Head of the Department where the deceased member of the armed 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 above .
If Officer was Receiving Disability Pension
I have already written that the disability pension is tax-free for armed forces. So, if the widow receives Special Family Pension on account of disability, in my opinion, it should be tax free for the same reason why the disability pension is tax free when the Armed Force personnel was alive and getting the disability pension.
Conclusion on taxability of Special Family Pension
The special family pension received by widow/children or others is tax free only when the head of department /Hqrs of the deceased member of the armed forces certifies that death of the said deceased member was under one of the conditions listed above. Otherwise pension is fully taxable
If the special family pension is tax-free u/s 10(19) , you do not have to include the amount of pension in the total income of yours for the year. If that is the only income you do not have to file tax return at all.
If the family pension is taxable for reason that the certificate was not issued , the return will have to be filed if the amount of special family pension plus your other income more than exemption limit