Taxation - Income TaxQuestion 5630 of 146
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8. During the year 2023-24, Mrs. Kalis (aged 65 years), received ` 10,50,000 a family pension. She had to spend ` 26,000 to get such income towards documentation and processing charges. She does not have any other income. Assuming she opts for3 the default tax regime, what shall be her total income chargeable to tax?

Options

A` 10,35,000
B` 10,24,000
C` 10,50,000
D` 7,00,000 (1 Mark) Answer Key MCQ No. Correct Option
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Correct Answer

Option A` 10,35,000

All Options:

  • A` 10,35,000
  • B` 10,24,000
  • C` 10,50,000
  • D` 7,00,000 (1 Mark) Answer Key MCQ No. Correct Option

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Detailed Solution & Explanation

Under the provisions of the Income-tax Act, 1961:
1. **Taxability of Family Pension:**
- Family pension received by a legal heir is taxable under the head "Income from Other Sources" (Section 56).
2. **Deductions:**
- Under Section 57(iia), a standard deduction is allowed on family pension equal to frac13textrd\displaystyle \\frac{1}{3}\\text{rd} of such pension or u20b915,000\displaystyle \\u20b915,000, whichever is less.
- Standard deduction = minleft(frac13timesu20b910,50,000,u20b915,000right)=min(u20b93,50,000,u20b915,000)=u20b915,000\displaystyle \\min\\left(\\frac{1}{3} \\times \\u20b910,50,000, \\u20b915,000\\right) = \\min(\\u20b93,50,000, \\u20b915,000) = \\u20b915,000.
- No other expenditures (such as documentation and processing charges of u20b926,000\displaystyle \\u20b926,000) are allowed as a deduction against family pension.
3. **Default Tax Regime Applicability:**
- The standard deduction of u20b915,000\displaystyle \\u20b915,000 for family pension under Section 57(iia) is fully available under the default tax regime (Section 115BAC).
4. **Total Income:**
- Total Income = Family Pension (u20b910,50,000\displaystyle \\u20b910,50,000) - Standard Deduction (u20b915,000\displaystyle \\u20b915,000) = u20b910,35,000\displaystyle \\u20b910,35,000.

Hence, **Option A** is the correct answer.

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