Salary and wages arising from employment are assessed to income tax under Schedule which option reflects the correct choice given in the material?

• A. D Case I.
• B. D Case II.
• C. E.
• D. F.

Answer: (C)

Salary and wages from employment are taxed under Schedule E because employment income is treated as a distinct source of income with its own rules, separate from other sources like business profits or investments. Schedule E specifically handles earnings from employment, including basic pay, allowances, perquisites, and related retirement benefits that are taxed as salary. The other schedules are meant for different kinds of income, so they don’t apply to ordinary employment earnings. Therefore, Schedule E is the correct choice.