Is family pension of armed forces taxable?

Which head — and why it matters

A serviceman's own pension is taxed as salary. But a family pension goes to someone who was never the employer's employee — the widow, the child. So the Income-tax Act taxes it under income from other sources, and gives it its own deduction there:

Section 57(iia): a deduction of "a sum equal to thirty-three and one-third per cent of such income or fifteen thousand rupees, whichever is less". Under the new regime (Section 115BAC(1A)(ii)), the cap is ₹25,000 — raised by the Finance (No.2) Act 2024.

When it is fully exempt — Section 10(19)

Family pension received by the widow or children or nominated heirs of a member of the armed forces (including para-military forces), where the death occurred in the course of operational duties, in prescribed circumstances and subject to prescribed conditions, is fully exempt from income tax. If your family pension is a battle-casualty or operational-death case (typically Liberalised Family Pension), read this section with your tax adviser before paying any tax on it.

Two related provisions to know of: Section 10(18) exempts the pension — and after death, the family pension — of gallantry-award winners as notified (Param Vir Chakra and others); we have not yet completed a clause-level check of its text, so treat this as a pointer, not advice. And the disability-pension exemption dispute is covered on the pension-and-tax page.

A worked example

Widow receiving an ordinary family pension of ₹30,000 per month (₹3,60,000 a year), no other income, ordinary (non-operational) death:

• Deduction, old regime: ⅓ = ₹1,20,000, capped at ₹15,000 → taxable ₹3,45,000
• Deduction, new regime: capped at ₹25,000 → taxable ₹3,35,000
• Tax then follows the normal slab rates of the chosen regime — there is no special family-pension slab. At these income levels, after the applicable rebates, the actual tax payable may well be nil — that depends on the year's slabs and your other income.

Not sure what the family pension itself would be? The Family Pension Calculator works it out — 30% ordinary, 60% special, 100% liberalised, MSP included — in your browser.

Questions and answers

Is family pension of armed forces taxable or not?

Ordinarily yes — it is taxable as income from other sources, after a deduction under Section 57(iia) of one-third of the pension or ₹15,000, whichever is less (₹25,000 under the new tax regime). But if the member died in circumstances covered by Section 10(19) — operational duties, subject to the prescribed conditions — the family pension is fully exempt.

Under which head is family pension taxed?

Income from other sources — not salary. A pensioner's own service pension is taxed as salary, but after death the family pension goes to a person who was never the employee, so it falls under other sources. That is exactly why the Section 57(iia) deduction exists.

How much of family pension is tax-free every year?

Under Section 57(iia): one-third of the family pension received, or ₹15,000, whichever is less. If you file under the new regime (Section 115BAC), the ₹15,000 cap becomes ₹25,000, raised by the Finance (No.2) Act 2024.

When is family pension fully exempt from income tax?

Under Section 10(19): family pension received by the widow or children or nominated heirs of a member of the armed forces (including para-military forces) where death occurred in the course of operational duties, in prescribed circumstances and subject to prescribed conditions. Gallantry-award cases have their own provision (Section 10(18)); verify your specific case with a tax adviser.

Is there a separate tax slab for family pension?

No. After the Section 57(iia) deduction, the remaining amount is added to your total income and taxed at the normal slab rates of whichever regime you file under. There is no special family-pension slab.

Related: Family Pension Calculator · Types of family pension · Pension and income tax — all sections · Download your pension slip