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Taxation of Pensions and Annuities: Exemptions and Deductions

Description: This quiz will test your knowledge on the taxation of pensions and annuities, including exemptions and deductions.
Number of Questions: 15
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Tags: taxation pensions annuities exemptions deductions
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Which of the following is exempt from income tax under Section 10(10A) of the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. All of the above


Correct Option: D
Explanation:

Under Section 10(10A) of the Income Tax Act, 1961, any pension received from a recognized Provident Fund, Superannuation Fund, or Gratuity Fund is exempt from income tax.

What is the maximum amount of deduction allowed under Section 80CCD(1B) of the Income Tax Act, 1961 for contributions made to a National Pension System (NPS) account?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: C
Explanation:

Under Section 80CCD(1B) of the Income Tax Act, 1961, a deduction of up to Rs. 20,000 is allowed for contributions made to a National Pension System (NPS) account.

Which of the following is not considered as a pension for the purpose of taxation under the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. Family pension received from an employer


Correct Option: D
Explanation:

Family pension received from an employer is not considered as a pension for the purpose of taxation under the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCD(2) of the Income Tax Act, 1961 for contributions made to an Atal Pension Yojana (APY) account?

  1. Rs. 1,000

  2. Rs. 2,000

  3. Rs. 3,000

  4. Rs. 4,000


Correct Option: B
Explanation:

Under Section 80CCD(2) of the Income Tax Act, 1961, a deduction of up to Rs. 2,000 is allowed for contributions made to an Atal Pension Yojana (APY) account.

Which of the following is not exempt from income tax under Section 10(10AA) of the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. Pension received from a Central Government employee


Correct Option: D
Explanation:

Pension received from a Central Government employee is not exempt from income tax under Section 10(10AA) of the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCD(1) of the Income Tax Act, 1961 for contributions made to a Pension Fund of a Central Government employee?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: A
Explanation:

Under Section 80CCD(1) of the Income Tax Act, 1961, a deduction of up to Rs. 10,000 is allowed for contributions made to a Pension Fund of a Central Government employee.

Which of the following is not considered as an annuity for the purpose of taxation under the Income Tax Act, 1961?

  1. Annuity received from a recognized Life Insurance Policy

  2. Annuity received from a recognized Pension Plan

  3. Annuity received from a recognized Gratuity Fund

  4. Annuity received from a recognized Provident Fund


Correct Option: D
Explanation:

Annuity received from a recognized Provident Fund is not considered as an annuity for the purpose of taxation under the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCC of the Income Tax Act, 1961 for contributions made to an Annuity Plan of a Life Insurance Company?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: B
Explanation:

Under Section 80CCC of the Income Tax Act, 1961, a deduction of up to Rs. 15,000 is allowed for contributions made to an Annuity Plan of a Life Insurance Company.

Which of the following is not exempt from income tax under Section 10(10D) of the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. Pension received from a State Government employee


Correct Option: D
Explanation:

Pension received from a State Government employee is not exempt from income tax under Section 10(10D) of the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCD(3) of the Income Tax Act, 1961 for contributions made to a Pension Fund of a State Government employee?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: A
Explanation:

Under Section 80CCD(3) of the Income Tax Act, 1961, a deduction of up to Rs. 10,000 is allowed for contributions made to a Pension Fund of a State Government employee.

Which of the following is not considered as a pension for the purpose of taxation under the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. Pension received from a recognized Pension Plan


Correct Option: D
Explanation:

Pension received from a recognized Pension Plan is not considered as a pension for the purpose of taxation under the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCD(4) of the Income Tax Act, 1961 for contributions made to a Pension Plan of a Public Sector Company?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: A
Explanation:

Under Section 80CCD(4) of the Income Tax Act, 1961, a deduction of up to Rs. 10,000 is allowed for contributions made to a Pension Plan of a Public Sector Company.

Which of the following is not exempt from income tax under Section 10(10C) of the Income Tax Act, 1961?

  1. Pension received from a recognized Provident Fund

  2. Pension received from a recognized Superannuation Fund

  3. Pension received from a recognized Gratuity Fund

  4. Pension received from a recognized Pension Plan


Correct Option: D
Explanation:

Pension received from a recognized Pension Plan is not exempt from income tax under Section 10(10C) of the Income Tax Act, 1961.

What is the maximum amount of deduction allowed under Section 80CCD(5) of the Income Tax Act, 1961 for contributions made to a Pension Plan of a University or Educational Institution?

  1. Rs. 10,000

  2. Rs. 15,000

  3. Rs. 20,000

  4. Rs. 25,000


Correct Option: A
Explanation:

Under Section 80CCD(5) of the Income Tax Act, 1961, a deduction of up to Rs. 10,000 is allowed for contributions made to a Pension Plan of a University or Educational Institution.

Which of the following is not considered as an annuity for the purpose of taxation under the Income Tax Act, 1961?

  1. Annuity received from a recognized Life Insurance Policy

  2. Annuity received from a recognized Pension Plan

  3. Annuity received from a recognized Gratuity Fund

  4. Annuity received from a recognized Provident Fund


Correct Option: D
Explanation:

Annuity received from a recognized Provident Fund is not considered as an annuity for the purpose of taxation under the Income Tax Act, 1961.

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