Section 57 of ITA, 1961 : Section 57: Deductions

Explanation using Example

Imagine Rita receives a family pension of INR 40,000 monthly after the death of her spouse, who was a former employee of a corporation. According to Section 57 of the Income-tax Act, 1961, Rita can claim a deduction while computing her taxable income. The deduction would be the lesser of 33.33% of the pension received or INR 15,000.

In Rita's case, 33.33% of INR 40,000 is INR 13,332, which is less than INR 15,000. Therefore, Rita can claim a deduction of INR 13,332 for that month while calculating her income from other sources, reducing her taxable family pension to INR 26,668.