It is well known that pensions are taxable as salary and whereas a family pension given to dependent family members after the death of an employee is taxable as income from another source under the Income Tax Act. However, in certain special circumstances, a pension is tax-free under the income tax act. In some cases, such exceptional circumstances that make a pension tax free are provided under section
Salary
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Taxation on salary income is done under section 15 to 21 of the Income Tax Act. There are clear provision related to perquisites , tax free allowance , relief on arrears salary , and how the retirement benefits are taxed.
The provident fund accumulation is exempt from tax , but those who have not completed five years of service, the withdrawal of provident fund is not tax free unless certain…