The Supreme Court of India held that OBC creamy layer status cannot be determined solely on the basis of parental salary, reaffirming that social status and the nature of parental employment are the primary determinants. The dispute arose after the Union of India denied OBC Non-Creamy Layer benefits to civil services candidates whose parents worked in PSUs and banks and earned above the prescribed income limit. The Court clarified that the 1993 Office Memorandum, issued following the landmark Indra Sawhney judgment, excludes salary income from the income/wealth test except in residual situations. It held that a 2004 clarificatory letter could not alter or override the established policy framework by treating income as the decisive factor. The Court further ruled that differentiating between children of PSU employees and government employees violates Articles 14 and 16. Accordingly, the appeals were dismissed, reconsideration of affected candidates was ordered, and the objective of reservations for genuinely backward classes was reaffirmed.