United Nations pension exemption extended to pension as salary-based tax immunity applied under the Income-tax framework.

Pension received from the United Nations Organisation was treated as exempt from income tax because the exemption for salaries and emoluments paid by the UN to its officials, recognised under the United Nations (Privileges and Immunities) Act, 1947 and Board Circular No. 293 dated 10 February 1981, was taken to extend to pension as well. The circular relied on section 17 of the Income-tax Act, 1961, under which pension is included within salary for tax purposes, and on that basis the referred question was answered against the Revenue.

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Issues: Whether pension received from the United Nations Organisation was exempt from tax for the assessment years in question.

Analysis: The question referred under section 256(1) of the Income-tax Act, 1961 was answered in the light of Board Circular No. 293 dated 10 February 1981. The circular noted that section 2 of the United Nations (Privileges and Immunities) Act, 1947, read with article V(b) of the Schedule thereto, grants exemption from taxation to salaries and emoluments paid by the United Nations to its officials. It further recorded that, since pension is included within salary for the purposes of section 17 of the Income-tax Act, 1961, the exemption applicable to salary would extend to pension as well. The circular was accepted by the Board and was relied upon for the answer to the referred question.

Conclusion: The pension received from the United Nations Organisation was held to be exempt from tax, and the question was answered against the Revenue.

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