Family Pension

Family Pension is a payment received by the family members of a deceased employee, typically after the employee’s death. It is meant to provide financial support to the dependents of the employee.

It is commonly received by a spouse, children, or other eligible family members.

What this really means

When a salaried individual passes away, their employer or pension authority may continue to provide a regular payment to their family.

This is called family pension. It helps ensure that the family has a steady source of income even after the earning member is no longer there.

Who Receives Family Pension?

Family pension is usually received by:

• Spouse of the deceased employee
• Children (in certain cases)
• Other dependent family members, as per rules

The eligibility depends on the terms of employment or pension scheme.

Tax Treatment of Family Pension

This is where most people get confused.

Family pension is not treated as salary income.

Instead, it is taxed under:

👉 Income from Other Sources

However, a standard deduction is allowed:

• ₹15,000 or
• 1/3rd of the pension amount

Whichever is lower.

Why Family Pension is Important

Family pension provides financial stability during a difficult time.

It helps:

• Support dependents after the loss of an earning member
• Maintain basic financial security
• Reduce financial stress on the family

Important Points to Remember

• It is taxable under “Income from Other Sources”
• Deduction is available as per tax provisions
• Proper reporting is required while filing income tax returns
• Supporting documents should be maintained