Section 10(19) – Exemption for Family Pension of Armed Forces Members
Understanding Family Pension:
Family pension refers to the regular monthly payment made by the government to the family of a deceased employee. For members of the armed forces, including paramilitary forces, this provision acknowledges the valor and sacrifice of personnel who have died in the course of operational duties.
Key Provisions of Section 10(19):
Exemption Applicability:
The exemption under Section 10(19) applies to the family pension received by the widow, children, or nominated heirs of a member of the armed forces.
Conditions for Exemption:
The exemption is granted where the death of the member occurred in the course of operational duties, under circumstances and conditions prescribed by the government.
Gallantry Awards and Exemptions:
Family pensions linked to gallantry awards such as the Param Vir Chakra, Maha Vir Chakra, and Vir Chakra are exempt from income tax. This provision ensures that the families of these brave individuals receive financial support without the burden of income tax.
Judicial Interpretations:
Courts have consistently upheld this exemption, emphasizing the legislature’s intent to honor the bravery of gallantry award winners by providing tax relief to their families. For instance, in the case of Union of India vs. D. Suryanarayana, the court reinforced the applicability of this exemption.
Section 10(19A) – Exemption for the Annual Value of Palaces Occupied by Rulers
Understanding the Exemption for Rulers’ Palaces:
Section 10(19A) provides an income tax exemption for the annual value of any one palace occupied by a ruler. This historical provision recognizes the unique status and heritage of the palaces owned by rulers.
Key Provisions of Section 10(19A):
Exemption Applicability:
The exemption applies to the annual value of a palace occupied by a ruler, provided the annual value was exempt from income tax before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971.
Historical Orders:
This exemption is based on the provisions of historical orders such as the Merged States (Taxation Concessions) Order, 1949, the Part B States (Taxation Concessions) Order, 1950, and the Jammu and Kashmir (Taxation Concessions) Order, 1958.
Provisions for the Assessment Year 1972:
For the assessment year commencing on April 1, 1972, the annual value of every such palace in the occupation of a ruler during the relevant previous year is exempt from income tax.
Frequently Asked Questions (FAQ)
Q1: What is Section 10(19) of the Income Tax Act?
Section 10(19) provides a tax exemption for family pensions received by the widow, children, or nominated heirs of a member of the armed forces, including paramilitary forces, when the death occurs in the course of operational duties.
Q2: Which gallantry awards are covered under Section 10(19)?
Gallantry awards such as the Param Vir Chakra, Maha Vir Chakra, and Vir Chakra are covered under Section 10(19), ensuring that family pensions linked to these awards are exempt from income tax.
Q3: What conditions must be met for the family pension exemption under Section 10(19)?
The exemption applies when the death of the armed forces member occurs in the course of operational duties, as specified by the conditions prescribed by the government.
Q4: What is Section 10(19A) of the Income Tax Act?
Section 10(19A) provides an income tax exemption for the annual value of any one palace occupied by a ruler, provided it was exempt from income tax before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971.
Q5: Which historical orders are relevant to the exemption under Section 10(19A)?
The exemption is based on the Merged States (Taxation Concessions) Order, 1949, the Part B States (Taxation Concessions) Order, 1950, and the Jammu and Kashmir (Taxation Concessions) Order, 1958.
Q6: For which assessment year does Section 10(19A) specifically mention the exemption?
The exemption specifically applies to the assessment year commencing on April 1, 1972, for palaces in the occupation of a ruler during the relevant previous year.
Q7: How can beneficiaries ensure they avail of these exemptions?
Beneficiaries should maintain proper documentation, stay informed about government notifications, and consult with tax professionals to ensure they meet all conditions and avail of the exemptions.
Q8: What are the compliance requirements for claiming exemptions under Section 10(19) and 10(19A)?
To claim these exemptions, beneficiaries need to submit appropriate documentation, such as gallantry award certificates for Section 10(19) and historical exemption status documents for Section 10(19A), along with their tax returns.
Q9: How does the exemption under Section 10(19) affect the taxable income of the family members of armed forces personnel?
The entire family pension received by the widow, children, or nominated heirs of armed forces personnel who died in operational duties is exempt from income tax, thus reducing the overall taxable income of the family members.
Q10: Can the exemption under Section 10(19A) be claimed for multiple palaces occupied by a ruler?
No, the exemption under Section 10(19A) applies only to the annual value of any one palace occupied by a ruler, provided it meets the specified conditions.
Conclusion
Understanding the specific exemptions under Section 10 of the Income Tax Act can provide significant tax relief for eligible individuals. Whether it’s the family pension for the heirs of armed forces personnel or the annual value of palaces occupied by rulers, these provisions ensure financial support and recognize the unique circumstances of these beneficiaries.
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