Provident fund is discussed in the salaries chapter because it is
Aa deduction from house property
Ba business expense of the employer
Ca capital gain on maturity
Da retirement benefit from employment
Answer & Solution
Correct answer: D. a retirement benefit from employment
1. The head Salaries covers what an employee receives by reason of employment.
2. Provident fund is a retirement benefit arising from that employment.
3. It is therefore treated within the salaries provisions.
4. Its treatment varies by the type of fund, which is why it gets its own discussion.
_Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.3_
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