Tax on Annuity
Employee often gets annual grant from his employer. Such grant is called as annuity. Annuity falls under the category of salary. The employer may pay the annuity either voluntarily or on account of contractual agreement. A deferred annuity is not taxable until the right to receive the same arises. Other form for annuities made under a will or granted by a life insurance company or accruing as a result of contract come under the head "Income from Other Sources" and are assessed u/s 56 of the I.T. Act.
Employee often gets annual grant from his employer. Such grant is called as annuity. Annuity falls under the category of salary. The employer may pay the annuity either voluntarily or on account of contractual agreement. A deferred annuity is not taxable until the right to receive the same arises. Other form for annuities made under a will or granted by a life insurance company or accruing as a result of contract come under the head "Income from Other Sources" and are assessed u/s 56 of the I.T. Act.
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