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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Mr. Sanjay Kulkarni, a resident individual in the 30% slab (ignore surcharge and cess), received Rs 1,00,000 as compensation interest. Consider instead this case: he received family pension of Rs 1,20,000 during the year and no other pension. Assume the standard deduction on family pension is the lower of one-third of the pension or Rs 15,000. What is his taxable income from family pension under income from other sources?

The taxable family pension is Rs 1,05,000. The deduction is the lower of one-third of the pension (Rs 40,000) and Rs 15,000, which is Rs 15,000, and this is subtracted from Rs 1,20,000 to give Rs 1,05,000 under income from other sources.

  1. ARs 1,05,000Correct
  2. BRs 80,000
  3. CRs 1,20,000
  4. DRs 40,000

Explanation

Family pension is taxed under Income from Other Sources. The deduction is the lower of one-third of Rs 1,20,000 = Rs 40,000 and Rs 15,000, so Rs 15,000. Taxable amount = 1,20,000 - 15,000 = Rs 1,05,000. Deducting Rs 40,000 gives Rs 80,000, which uses the higher figure instead of the lower.

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