I am retired and get a pension and after my death my wife will be entitled to get pension as long as she lives. Will my wife have to pay tax on the pension received by her?
Sameer Chugh, Noida
The pension received by your wife after your demise is known as family pension. Family pension is taxable in the hands of the legal heir, which in this case is your wife. The pension received by an individual from former employers after their retirement is fully taxable in their hands, which means even you are currently liable to pay taxes on this pension income. However, family pension received by the deceased’s family is eligible for standard deduction and it is taxable under the head ‘Income from other sources’ when the legal heirs file their tax returns.
