Match the items of List-I with the items of List-II under the Income-tax Act, 2025 and choose the…
Under the Income-tax Act, 2025: (a) Compensation due to or received by an employee from his employer or former employer at or in connection with the termination of his…
Choose your answer
Match the items of List-I with the items of List-II under the Income-tax Act, 2025 and choose the correct answer from the code given below.
(a) Compensation received by an employee from his employer in connection with the termination of his employment — (i) Deductible from salary up to a specified limit
(b) Family pension received by the widow of a deceased employee of a company — (ii) Profits in lieu of salary
(c) Allowance paid or allowed outside India by the Government to an Indian citizen for rendering service outside India — (iii) Income from other sources
(d) Cash equivalent of leave salary received by a non-Government employee on retirement — (iv) Fully exempt from tax
Answer and explanation
Correct answer A
Under the Income-tax Act, 2025:
(a) Compensation due to or received by an employee from his employer or former employer at or in connection with the termination of his employment is 'profits in lieu of salary' under section 18(1)(a) (formerly s.17(3)) (ii).
(b) Family pension received by a member of the family after the employee's death is chargeable under 'Income from other sources' under section 92(1), subject to the deduction in section 93(1)(d) (iii).
(c) Allowances or perquisites paid or allowed outside India by the Government to an Indian citizen for rendering service outside India are excluded from total income in full under section 11 read with Schedule III (Table: Sl. No. 9) (formerly s.10(7)) (iv).
(d) Leave salary received on retirement by a non-Government employee is deductible under section 19 (Table: Sl. No. 14) (formerly s.10(10AA)). The deduction is limited to the least of the amounts specified there, one of which is the limit notified by the Central Government (i).
The correct code is therefore (a)-(ii), (b)-(iii), (c)-(iv), (d)-(i).
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