Income Tax Exemption for Gallantry Award Pension and Family Pension under Section 10(18)

Section 10(18) of the Income-tax Act, 1961 provides a complete exemption for qualifying pension paid to certain Central or State Government gallantry award recipients, as well as qualifying family pension received by their family members.

What does Section 10(18) provide?

Under Section 10(18) of the Income-tax Act, 1961, the following income is excluded from total income:

1. Section 10(18)(i): Pension received by an individual who has served the Central Government or a State Government and received the Param Vir Chakra, Maha Vir Chakra, Vir Chakra or another gallantry award specifically notified by the Central Government in the Official Gazette.
2. Section 10(18)(ii): Family pension received by a member of the family of an individual qualifying under sub-clause (i).

The Explanation to Section 10(18) adopts the meaning of family given in the Explanation to Section 10(5). It covers the spouse and children and, subject to the specified dependency condition, parents, brothers and sisters.

Eligibility and exempt amount

Conditions for claiming the exemption

1. Confirm that the pension relates to qualifying Central or State Government service.
2. Verify the award certificate or official award record. For awards other than the three expressly named medals, confirm the relevant Central Government Gazette notification.
3. For family pension, establish the relationship to the qualifying award recipient and any dependency condition relevant to the statutory definition of family.
4. Retain the pension payment records, award documents and relevant family relationship records in case verification is required.

Difference between pension and family pension

Pension is a periodic retirement or service-related payment received by the former employee. Family pension is a payment received by an eligible family member following the employee's death under the applicable pension rules. Section 10(18) separately exempts qualifying payments of both kinds.

This exemption should not be confused with Section 10(19), which deals with specified family pension relating to death of armed forces (including paramilitary forces) personnel during operational duties, subject to statutory conditions. See the official text of Section 10.

Illustrative examples

Example 1: A retired State Government employee who was awarded the Vir Chakra receives a qualifying pension. The entire qualifying pension is exempt under Section 10(18)(i).

Example 2: After the death of a qualifying Param Vir Chakra recipient, the spouse receives family pension. The qualifying family pension is exempt under Section 10(18)(ii).

Example 3: A government retiree who has not received a specified or notified gallantry award cannot claim Section 10(18) merely because the pension is paid by the government.

Applicable law and official resources

Section 10(18) is the provision under the Income-tax Act, 1961 traditionally used to identify this exemption. For tax years governed by the Income-tax Act, 2025, consult the corresponding provisions and schedules of the new law and applicable amendments rather than assuming old section numbering continues unchanged.

• Income Tax Department: Section 10, Income-tax Act, 1961
• Income Tax Department: Acts, rules and notifications
• Income Tax e-Filing portal
• Gazette of India: Government notifications

Updated 10 October 2026. This article is general information; eligibility should be checked against the legislation and notifications applicable to the relevant tax year.