Dear Sir, Superannuation is exempt upto a limit if received at the time of Retirement, Death, Physical incapacity. But in your case it will be taxable as you are receiving it upon resigning. Hence it will be taxable. Yes, you can save taxes if you invest the proceeds in a pension fund but that also has a cap based on your Salary Structure etc. Plus the interest paid or the benefits derived from a Pension Fund is not upto the mark. So it is advisable to consider the tax impact and then decide if you want to go for NPS or invest it elsewhere. Trust this clarifies your query. Feel free to get back/ call for any further clarifications. Thanking You. Regards, CA Rohit R Sharma BCOM, ACA, LLB - GEN, CERT. FAFP.