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CS Executive · Tax Laws and Practice · Classification and Tax Incidence on Companies

Under section 124 of the Income-tax Act, 2025, which of the following receipts is expressly NOT deemed to be income of the recipient?

The amount received by the nominee on the assessee's death, on closure of the account, is not deemed income of the nominee under section 124(7). Closure or opting-out proceeds received by the assessee and annuity pension are deemed income under section 124(6).

  1. AAmount received by the assessee on opting out of the pension scheme
  2. BPension received by the assessee from an annuity plan purchased on closure of the account
  3. CAmount received by the nominee on the death of the assessee on closure of the accountCorrect
  4. DAmount received by the assessee on closure of the account, not used to buy an annuity in the same year

Explanation

Section 124(6) deems closure or opting-out proceeds and annuity pension to be income. Section 124(7) carves out the amount received by the nominee on the death of the assessee under the closure circumstances, so it is not income of the nominee.

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