SHASHIKANT LAXMAN KALE AND ANR. vs UNION OF INDIA AND ANR.

The Supreme Court upheld the constitutional validity of Clause (10-C) of Section 10 of the Income Tax Act, 1961, which provides tax exemption for public sector employees under voluntary retirement schemes. The Court found that the exclusion of private sector employees from this benefit is not arbitrary and does not violate Article 14, as public sector employees constitute a distinct class with a rational nexus to the objective of promoting national economic policy. The petition challenging this classification was dismissed, affirming the government's discretion in defining welfare measures for public sector employees.