Yes, pension income is included in the definition of salary. The pension is a benefit that is provided by an ex-employer to their ex-employees as a part of the employment agreement. Hence, the pension received under a contractual agreement between the employer and employee is taxable under the head salaries. However, if you receive a pension from any policy with an insurance company then it will be taxable under the head income from other sources. You can claim the tax rebate under section 87 of up to Rs 12,500 under both regimes against pension under salaries. However, the pension under income from other sources is taxable.