It is clear that taxing pensions is not a popular arrangement. All pensioners would be very happy if the Government allowed payment of pensions free of tax. This paper explores the current scope of charging tax on pensions and explains the treatment of contributions and premiums payable to pension funds and insurance policies respectively. It is also pointed out that there is a need for exempting pensions from income tax. We also make suggestions on changing certain provisions of the Income Tax Act 1973 which deal with pension matters.