Provisions of section 10(13) of the Income Tax Act exempts payment received from an approved superannuation fund. The present article briefly explains the term ‘approved superannuation fund’ and covers exemption available under provisions of section 10(13).

Basic understanding of the term ‘approved superannuation fund’ and tax benefits thereon-

In simple terms, superannuation is an organizational pension program designed by the company for the benefit of its employees. The superannuation fund approved by the Commissioner of Income Tax is known as ‘approved superannuation fund’. Income tax benefits available to an approved superannuation fund is briefed hereunder-

  • Deduction under section 80C is available against the employee’s contribution to the approved superannuation fund.
  • Interest received on the superannuation fund is exempt from tax.
  • Employer’s contribution to the approved superannuation fund is exempt to the extent of INR 1.50 Lakhs per year per employee. If the amount exceeds INR 1.50 Lakhs, the excess amount would be taxable in the hands of the employee.
  • The amount received from an approved superannuation fund is exempted as per provisions of section 10(13).

Exemption available under section 10(13) of the Income Tax Act

Any payment from an approved superannuation fund, made under following circumstances, shall be exempt-

1. The payment has been made on the death of the beneficiary; or

2. The payment has been made, by way of refund of the contributions, on the death of the beneficiary; or

3. The payment has been made, by way of transfer, to the account of the employee under the pension scheme referred under section 80CCD and notified by the Central Government; or

4. The payment has been made to an employee in lieu of / in commutation of an annuity either on his retirement, at or after a specified age or on him becoming incapable prior to his retirement; or

5. The payment has been made, by way of refund of contribution, to an employee on leaving the service (in connection with which the fund is established) at or after a specified age or on the employee becoming incapable prior to his retirement.

Table – Articles on Section 10 Exemptions

Sr. No. Particulars
1 Section 10(1)– Exemption to Agricultural Income
2 Section 10(2) Exemption to amount received by co-parcener from HUF
3 Section 10(2A) Exemption towards share of income from firm/LLP
4 Exemptions towards interest to non-residents | Section 10(4) & 10(4B)
5 Exemption on Tax paid by Govt or Indian concern on certain income of a foreign company
6 Section 10(7) Perquisites/allowances exemption to Govt employees serving outside India
7 Exemption- Section 10(8A) & section 10(8B) of Income Tax Act
8 Exemption towards commuted value of pension Section 10(10A)
9 Exemption towards retrenchment compensation received by workman Section 10(10B)
10 Section 10(10BC) Exemption towards compensation received on account of any disaster
11 Section 10(10C) Exemption of amount received on voluntary retirement
12 Exemption towards tax paid by employer on non-monetary perquisites: Section 10(10CC)
13 Section 10(10D) Exemption towards amount received under a Life Insurance Policy
14 Exemption for amount received from Statutory & Recognized PF
15 Exemption for payment from approved superannuation fund Section 10(13)
16 Income Tax Exemption on prescribed allowances/ benefits | Section 10(14)
17 Section 10(15) Exemption- Interest on Bonds, Debentures, Securities
18 Scholarship exemption | Section 10(16) | Income Tax Act 1961
19 Exemption towards income for administration of Charitable or Religious Institution
20 Section 10(32) Exemption | Income of minor clubbed with parent
21 Exemption for dividend income received from Indian Company | Section 10(34)
22 Section 10(34A) Exemption towards income received by a shareholder on buy back of shares
23 Section 10(35) Exemption towards income received from units
24 Section 10(37) Exemption towards Capital Gain arising on Compulsory Acquisition of Urban Agricultural Land

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  1. vasant paranjpe. says:

    Der Sir,
    I am receiving my pension from ITC Pension Fund, Kolkata through LIC. ITC Pension Fund is approved superannuation fund under I tax act and all the contributions were paid by the employer. On my retirement, I commuted 1/3rd of my pension and am receiving 2/3rd of full pension since May 1999.Also, since May 1999 1/3rd of pension is accounted towards recovery of lumpsum amount paid to me at retirement. So far 3 times of the lumpsum amount has been deducted from my pension. My question is, When Supreme Court of India has decided in 1986 that all pensioners are entitled for restoration of commuted portion of pension after 15 years of retirement in case of EPFO pensions, why the same rule is not applicable in my case i.e. pension from approved super – annuation fund ?
    vasant paranjpe.

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