Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Calculate the deduction from family pension under the regular and new tax regimes for AY 2026–27.
Calculate taxable family pension
Deduction
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Taxable family pension
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Family pension is generally reported under income from other sources, not salary pension.
How This Is Calculated
Family pension (received by a dependent after the pensioner's death) gets a standard deduction under Section 57(iia) equal to the lower of one-third of the gross family pension or a fixed ceiling — the ceiling differs by regime (higher under the new regime than the old regime for FY 2025-26). This deduction is separate from, and computed differently than, the regular salary/pension standard deduction.
Frequently Asked Questions
How is the family pension deduction calculated?
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The deduction is the lower of one-third of the gross family pension received, or a fixed regime-specific ceiling — this is a different formula from the flat standard deduction available on regular salary or pension income.
Is the family pension deduction ceiling the same in both tax regimes?
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No, the ceiling differs between the old and new regime — check the calculator's regime toggle for the exact figure applicable to your chosen regime for the relevant financial year.
Is family pension taxed differently from regular pension?
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Yes. Regular pension is taxed as salary income with the regular salary standard deduction. Family pension is taxed under "Income from Other Sources" with its own one-third/ceiling deduction under Section 57(iia) — the classification and deduction mechanism are both different.
Scope: Computes the deduction available on family pension income (received by a legal heir, not the original pensioner) under the specific 'family pension' deduction, distinct from the salary standard deduction.
Calculation logic
Family pension is taxable under 'Income from Other Sources' (not 'Salary', since the recipient is not the employee but a legal heir) — a flat deduction applies: lower of (1/3rd of the family pension received, or the currently prescribed flat amount) is deductible.
This deduction amount differs between the old and new tax regimes as currently prescribed (both regimes allow this deduction, but the flat-amount cap differs by regime), which the calculator applies based on the regime selected.
Net taxable family pension = Family pension received − Applicable deduction (lower of 1/3rd or the regime-specific cap).
Inputs and assumptions
This deduction is distinct from the standard deduction under Section 16(ia) (which applies to the original pensioner's own pension, treated as salary income) — family pension received by a legal heir after the pensioner's death uses this separate, smaller flat-deduction mechanism instead.
Available under both tax regimes (unlike most other deductions restricted to the old regime), though the specific capped amount differs by regime.
Exclusions and edge cases
Does not apply to the original pensioner's own pension (from their former employer) — that is taxed as salary income with the standard Section 16(ia) deduction; use the Standard Deduction Calculator for that scenario instead.
Commuted pension and uncommuted pension have different taxability treatment even for the original pensioner — this calculator addresses only the family-pension-specific deduction for a legal heir's uncommuted family pension receipt.