It is taxable under the head income from other sources subject to some exemption.
- If the pension is commuted or is a lumpsum payment then it is not taxable.
- Uncommuted pension received by a family member is exempt to a certain extent i.e. Rs 15,000 or 1/3rd of the uncommuted pension received -whichever is less is exempt from tax.
Family pension to the family of armed forces personnel including para military forces is not taxable where the death of such person has occurred in the course of operational duties.