According to Section 17(1) salary includes the following amounts received by an employee from his employer, during the previous year : … any annuity or pension.

Income by way of Salary [Section 17(1)]

• Wages
• any gratuity
• any annuity or pension
• any advance of salary
• any fees
• any payment received by an employee in respect of any period of leave not availed of by him
• the aggregate of all sums that are comprised in the transferred balance as referred to in sub-rule (2) of Rule 1] of Part A of the Fourth Schedule, of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax, under sub-rule
• the annual accretion to the balance at the credit of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under Rule 6 of part A of the Fourth Schedule.
• the contribution made by the Central Government or any other employer in the previous year, to the account of an employee under a pension scheme referred to in Section 8OCCD  

(1) Wage: any amount received by a person for work done or job rendered is called wages. It is fully taxable uls 15 if received during the relevent previous year. It may be for actual work or leave salary or actually received or due during the relevant previous year.

(2) Any Gratuity: Any sum received by employee from his past employer as a token of gratitude for services rendered in past is called gratuity. This amount is exempted upto certain limits given u/s 10(10) and it is dealt with in this very chapter at a later stage.

(3) Any Annuity or Pension : Any amount received by employee from past employer after attaining the age of retirement or superannuation is fully taxable. It may be received direct as pension or out of a superannuation fund created by employer; in both cases it is taxable.

(4) Any advance salary : In case an assessee receives some salary in advance in a previous year and which was actually not due in that year shall be taxable in the year of receipt. It does not include any loan or advance taken from employer.

(5) Any Fee: any amount received from employer under the name of fee is also fully taxable.
(a) any Bonus: Bonus is fully taxable under the head ‘Salaries’ on receipt basis. In case arrears of bonus are received in a previous year, these are fully taxable. Bonus can be of two types : 1. Gratuitous Bonus: It is a casual benefit and is taxable as a receipt from employer and having no other implication 2. Statutory Bonus—It is received under some legal or contractual obligation and is fully taxable. (b) any Perquisite: Any benefit or amenity allowed by employer to employee. (c) any Profit in lieu of or in addition to salary:any cash payment received by employee from employer is called profit in lieu of salary. (d)Any Commission: any commissions given by employer to employee is fully taxable. Any commission received by a director for standing guarantee for repayment of loan, and if he is not employee of the company, shall be taxable under “Income from other sources”. In case commission is given to an employee and it is paid as a fixed percentage of turnover achieved by such employee, such commission shall also be treated as part of the salary for all practical purposes. (e) any Profit in lieu of or in addition to salary: any cash payment received by employee from employer is called profit in lieu of salary.

(6) any salary in lieu of leave received during service is fully taxable.