It varies depending on the type of benefit, the receiving method, etc.

 

(1) Retirement benefits are taxable as retirement income if received in a lump sum (one-time receipt). But, they are not taxed within the amount of retirement income deduction.

In the case of periodic payments (annuity), retirement benefits are taxable as miscellaneous income and tax will be withheld at source upon each receipt. Public pension deduction is applicable.

(2) Disability benefits are not taxable.

(3) Lump-sum death benefit is subject to inheritance tax as a deemed inheritance.