## Exemption — Approved Superannuation Fund [Section 10(13)]

Any payment received by an employee from an approved superannuation fund is exempt from tax if the payment is made in any of the following situations:

✓ On the death of a beneficiary.
✓ On retirement — payment received in lieu of, or in commutation of, an annuity when the employee retires at a specified age, or becomes incapacitated before retirement.
✓ Refund of contributions on death of the beneficiary.
✓ Transfer to a notified pension scheme under section 80CCD.

### Key idea

Superannuation fund payouts are exempt when they arise from genuine retirement, death, incapacity, or an authorised transfer — situations where the corpus is being used for its intended retirement-benefit purpose rather than being withdrawn arbitrarily.

⚠️ Common exam mistakes

Assuming all superannuation fund withdrawals are exempt — exemption applies only to the specified events (death, retirement/commutation, incapacity, transfer to 80CCD scheme).
Overlooking that a transfer to a notified pension scheme under section 80CCD also qualifies for exemption.

Bare-Act text Section 10(13) · Income-tax Act · click to expand

Any payment received by any employee from an approved superannuation fund shall be exempt if the payment is made: on the death of a beneficiary; in lieu of or in commutation of an annuity on retirement at a specified age or on becoming incapacitated prior to such retirement; by way of refund of contributions on the death of a beneficiary; or by way of transfer to a notified pension scheme under section 80CCD.

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Exemption for payments from approved superannuation fund [Section 10(13)]

⚠️ Common exam mistakes