Annuity Income

Annuity income refers to regular, periodic payments received from an insurance policy, pension plan, or investment scheme.
It is commonly used as a retirement income source, ensuring financial security through steady cash inflows.

These payments may be:

• Monthly

• Quarterly

• Annually

• Sources of Annuity Income

  • Pension/retirement annuity plans offered by insurance companies

  • Government or corporate pension schemes

  • Superannuation funds

  • NPS (National Pension System) annuity portion

  • Investment annuity contracts

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   Tax Treatment in India

  Generally taxable under the head:
  “Income from Other Sources” — when annuity is purchased voluntarily (non-employer based)

   If annuity is received from an employer’s pension scheme, it is treated as:
  Salary (pension income)

  So, taxability depends on the origin of the annuity.

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   Example

  A person receives ₹50,000 annually from a retirement annuity plan purchased from an insurer.

   This amount is taxable in the year of receipt as
  Income from Other Sources
  and added to the taxpayer’s total income.