Pension received by certain Awardees/any Member of their family [Section 10(18)]

Under Section 10(18) of the Income Tax Act, certain awardees and their family members are eligible for tax exemption on the pension received. This provision is applicable to individuals who have been awarded with the Param Vir Chakra, Maha Vir Chakra, or Vir Chakra, which are the highest gallantry awards in India.

The pension received by the awardees or any member of their family is fully exempt from income tax. This exemption is available for both the lump sum amount as well as the periodic pension payments. The purpose of this exemption is to recognize the bravery and sacrifices made by these individuals and their families.

It is important to note that the exemption is only applicable to the pension received by the awardees or their family members. Any other income earned by them will be subject to regular income tax provisions.

Who is eligible for the exemption?

• An individual who has been in the service of the Central or State Government and has been awarded the Param Vir Chakra, Maha Vir Chakra, Vir Chakra, or such other gallantry award as may be specifically notified by the Central Government.
• Any member of the family of such individual who receives family pension.
• To claim the exemption under section 10(18), the awardee or their family members need to submit a copy of the gallantry award certificate to the income tax department.

Here are some examples of family members who are eligible for the exemption under section 10(18):

• Spouse
• Children
• Parents
• Siblings
• Grandchildren

Conditions for exemption:

• The individual must have been in the service of the Central Government or State Government.
• The individual must have been awarded one of the following gallantry awards:
  • Param Vir Chakra
  • Maha Vir Chakra
  • Vir Chakra
  • Ashoka Chakra
  • Kirti Chakra
  • Shaurya Chakra
  • Sena Medal (Gallantry)
  • Vayu Sena Medal (Gallantry)
  • Nau Sena Medal (Gallantry)
  • Any other gallantry award as may be specifically notified by the Central Government.
• The pension must be received by the individual or their family member.

How to claim the exemption:

If you are eligible for the exemption under Section 10(18), you can claim it by filing your income tax return. You will need to attach a copy of your gallantry award certificate to your return.

If you are a family member of a gallantry awardee, you can claim the exemption by filing your income tax return and attaching a copy of the gallantry awardee’s certificate and a copy of your relationship proof.

Examples of Exemptions:

1. A retired army officer who has been awarded the Param Vir Chakra receives a pension of Rs. 10,000 per month. The entire amount of the pension is exempt from tax under Section 10(18).
2. The widow of a retired army officer who was awarded the Maha Vir Chakra receives a family pension of Rs. 5,000 per month. The entire amount of the pension is exempt from tax under Section 10(18).
3. A retired soldier who has been awarded the Param Vir Chakra receives a pension of Rs. 1 lakh per month. This pension is exempt from tax under Section 10(18).
4. The widow of a soldier who was killed in action receives a family pension of Rs. 50,000 per month. This family pension is also exempt from tax under Section 10(18).