Law:

Section:

Section 10(13) of the Income-tax Act, 1961, read with article 16(1), of the Double Taxation Avoidance Agreement between USA and India - Approved Superannuation Fund, Payment From - Applicant, who was working as an employee in an Indian company, resigned from said company and left India in 1998 to take up job in USA - During year 2002-03, applicant received staff-superannuation fund from Indian company - Whether amount received by applicant from superannuation fund in 2002-03 for services rendered in India is taxable in India as per DTAA with USA - Held, yes - Whether amount having been received by applicant from superannuation fund, on resignation before specified age, is eligible for exemption under section 10(13) - Held, no FACTS The applicant, who was working as an employee in an Indian company, resigned from the said company and left India in 1998 to take up job in USA. He claims that he is a non-resident from the assessment year 1999-2000 onwards. During the year 2002-03, the applicant received staff superannuation fund from the Indian company. The applicant is seeking advance ruling on the questions as to whether the amount received from superannuation fund in 2002-03 is taxable in India in view of the DTAA with USA and whether said amount is entitled to exemption under section 10(13). HELD Section 10(13) exempts only the payments received on retirement at or after a specified age. Payment made on resignation will be exempt only if it is after the specified age. Undoubtedly, it is not the claim of the applicant that he resigned only after the age specified for voluntary retirement. [Para 5] In the instant case, article 16(1) of the DTAA with USA is also of no help. The said article only says that salaries in respect of employment in USA shall be taxable only in that State. The payment received from former employer in India is taxable under the head 'Salaries' in India in the year of receipt. [Para 6] In the light of the above, the amount received from superannuation fund in 2002-03 for services rendered in India is taxable in India as per the DTAA with USA and the amount received from superannuation fund on resignation before specified age is not eligible…

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