How is an ordinary uncommuted pension paid monthly by a former employer generally classified under the Income-tax Act, 2025?
Question and options
How is an ordinary uncommuted pension paid monthly by a former employer generally classified under the Income-tax Act, 2025?
Income from other sources
Capital gains
Exempt income
Salary
Answer and explanation
Correct answer: D - Salary
Section 16(b) of the Income-tax Act, 2025 includes any annuity or pension in salary, because a pension from a former employer arises from the employment. Income from other sources is the head for a family pension received by the family after the employee's death, not for the employee's own pension.
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