PENSIONS & SOCIAL SECURITY FROM US & UK TAX EXEMPT!

Family Pension received by a Widow is entitled to Standard Deduction at 33.33%, subject to a maximum of Rs.30,000

  Today’s write-up deals with some interesting issues relating to taxability of dues, family pension etc. received by legal heirs of a deceased employee, receipt of commuted pension by specified employees and Public Pensions/Social Security payments received from abroad by Indian Residents.   
 

LEAVE SALARY TO LEGAL HEIRS EXEMPT!

       Under Letter No.35/1/65-IT(B) dated 5-11-1965, the Central Board of Direct Taxes (CBDT) has clarified that the leave salary paid to the legal heirs of a deceased employee in respect of privilege leave standing to the credit of such employee at the time of his/her death is not taxable as salary.  Similarly, under Circular No.309 dated 3-7-1981, the CBDT has also clarified that receipt of cash equivalent of leave salary, which the deceased Government employee would have got if he had gone on earned leave, by the family of the deceased employee, is not liable to income-tax. (more…)