Section 6 l Property Within Disposing Capacity
Circular No. 330 was issued by the Central Board of Direct Taxes on 6 March 1982. Its subject is Section 6 l Property Within Disposing Capacity.
Says that death grants paid by the Indian Air Force Benevolent Association to the family of an officer or airman who dies in service do not form part of the deceased's estate and no estate duty may be levied on them. The grants are made under clause 2(a) of the Association's Memorandum of Association, whose object is to relieve hardship or distress among past and present ranks of the Indian Air Force and their dependants domiciled in India. Because the grants are discretionary, accrue only on death in service and not during the officer's lifetime, and are made to relieve the dependants' distress, no claim to duty lies under any provision of the Estate Duty Act. Officers are told to make no attempt to levy duty on such grants received by widows or dependants.
The character of these death grants under the Estate Duty Act had to be settled so that duty was not demanded from the families of deceased Air Force personnel.
| Under the 1961 Act | Now |
|---|---|
| s.6 | s.6 |
SECTION 6 l PROPERTY WITHIN DISPOSING CAPACITY
1517. Death grants given by Indian Air Force Benevolent Association to members of family of officer/airman - Whether form part of estate liable to estate duty
1. Clause 2(a ) of the Memorandum of Association of the Indian Air Force Benevolent Association makes the following as one of the objects of the Association :
"To relieve hardship or distress among all past and present ranks of the Indian Air Force and their dependants, especially those disabled by flying, provided that the past personnel and/or their dependants are domiciled in India."
2. It appears that under this clause certain grants known as "death grants" are given by the IAF Benevolent Association to the members of the family of an officer/airman of the Indian Air Force who dies whilst in service; that these grants are discretionary in nature that they accrue only in the event of death of an officer/airman whilst in service and not during his lifetime; and that these are made with a view to relieving hardship or distress to the dependants of the deceased officer/airman. Hence, claim to duty does not lie under any of the provisions of the Estate Duty Act. The death grants that could be received under the above clause from the IAF Benevolent Association do not form part of the estate of the deceased.
3. No attempt should, therefore, be made to levy estate duty in respect of death grants received by the widows and/or dependants of the Air Force personnel under the abovementioned clause.
Circular : No. 3, dated 11-5-1967.
Only in an old estate duty assessment of an Air Force officer's estate where a death grant was proposed to be included.
Source: the Income Tax Department’s own published text — its page for this instrument.
