Superannuation fund payout on resignation is taxable when statutory conditions for exemption are not met.

Payments received on resignation from an approved superannuation fund are excluded from salary only if they satisfy rule 3(b) of Part B of the Fourth Schedule. Where the receipt does not meet those conditions, it loses the character of an approved superannuation fund payment and section 17(3)(ii) exclusion does not apply. The receipt is also outside section 10(13), and the special exemption in section 10(13)(iv) is confined to refund of contributions made before commencement of the Act. On that basis, the amount falls within the inclusive definition of income and is taxable under the Income-tax Act, 1961.

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Issues: Whether the amount received by the assessee from the superannuation fund on resignation was taxable under the Income-tax Act, 1961.

Analysis: Payments from an approved superannuation fund are excluded from salary only when they conform to the conditions of rule 3(b) of Part B of the Fourth Schedule. If the payment falls outside those conditions, it does not retain the character of a payment from an approved superannuation fund and the exclusion in section 17(3)(ii) does not apply. Such a receipt is also not protected by section 10(13), and the special exemption in section 10(13)(iv) is limited to refund of contributions made before commencement of the Act. The receipt, therefore, answers the inclusive definition of income and is taxable under the Act.

Conclusion: The receipt was taxable and the assessee's claim for exclusion failed.

Ratio Decidendi: A payment received on resignation from a superannuation fund is taxable where it is not made in accordance with the conditions governing an approved superannuation fund and is not covered by the statutory exemption for such fund payments.

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