Exemption under approved superannuation funds [Section 10(13)]
## Exemption — Approved Superannuation Fund [Section 10(13)]
Any payment received by an employee from an approved superannuation fund is exempt when made in the following situations:
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 before retirement.
A refund of contributions on the death of the beneficiary is tax-exempt.
Payments transferred to a notified pension scheme under Section 80CCD.
⚠️ Common exam mistakes
Assuming all superannuation-fund payments are exempt — exemption applies only in the specified situations (death, commutation/annuity on retirement or incapacity, refund on death, or transfer to a notified NPS).
Confusing payments from an approved superannuation fund (exempt under 10(13)) with payments from an unrecognised fund (taxable as profits in lieu of salary).
Bare-Act text Section 10(13) · Income-tax Act, 1961 · click to expand
Any payment from an approved superannuation fund made on the death of a beneficiary, or to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement, or by way of refund of contributions on the death of a beneficiary, or by way of refund of contributions to an employee on leaving service (in connection with which he is not employed by another employer), or by way of transfer to the account of the employee under a pension scheme referred to in section 80CCD and notified by the Central Government, is exempt.