Deferred annuity contributions under a superannuation trust are not salary when the employee lacks a vested present right.

Employer contributions paid to trustees under a deferred annuity superannuation scheme were not taxable as a perquisite or as salary under section 7(1) of the Indian Income-tax Act, 1922, because the employee had no present vested right in the contribution before superannuation or another triggering contingency. The provision applies only where the employee has an enforceable present entitlement, and Explanation 1(v) covers sums paid by the employer to secure an assurance or annuity on the employee's life only in that sense. A merely contingent future benefit does not amount to an amount allowed to or due to the employee.

---

---

Issues: Whether the employer's contributions to a trust under a deferred annuity superannuation scheme were taxable as a perquisite or as an amount allowed to or due to the employee under section 7(1) of the Indian Income-tax Act, 1922, and whether Explanation 1(v) brought such contributions within salary income.

Analysis: The scheme showed that the employer's share of the premium was paid to trustees and held under the trust deed until the employee reached superannuation or another contingency occurred. Until that event, the employee had no vested right in the employer's contribution; at most, he had a contingent interest, while the amount could in some contingencies become payable to the employer. Section 7(1) taxes salary, wages, perquisites, and similar amounts only when they are allowed to or due to the employee, and Explanation 1(v) covers sums payable by the employer to effect an assurance or annuity on the employee's life. On a combined reading, the provision applies only where the employee has a present enforceable right, not a merely contingent future benefit.

Conclusion: The employer's contribution was not a perquisite and was not an amount allowed to or due to the employee under section 7(1) of the Indian Income-tax Act, 1922.

---