Encik Abu, who has been employed by SB Bank Bhd, resigned voluntarily from his employment with the bank on May 31, 2023 when the bank underwent reorganization. Encik Abu was 50 years old and had served the bank for 25 years. Upon his resignation, Encik Abu was awarded a lump sum payment of RM250,000 by the bank in appreciation of his past services. The bank remitted this amount directly to the EPF for the credit of Encik Abu's account with EPF. The payment to the EPF was in compliance with the provision in the agreement concluded between the bank and the trade union for bank employees. Required: State with reasons, whether the lump sum payment awarded to Encik Abu is assessable to tax.

Encik Abu, who has been employed by SB Bank Bhd, resigned voluntarily from his employment with the bank on May 31, 2023 when the bank underwent reorganization. Encik Abu was 50 years old and had served the bank for 25 years. Upon his resignation, Encik Abu was awarded a lump sum payment of RM250,000 by the bank in appreciation of his past services. The bank remitted this amount directly to the EPF for the credit of Encik Abu's account with EPF. The payment to the EPF was in compliance with the provision in the agreement concluded between the bank and the trade union for bank employees. Required: State with reasons, whether the lump sum payment awarded to Encik Abu is assessable to tax