Shweta Swarnkar Started The Discussion:Dear All,
"Tax exemption on gratuity"
(Gratuity up to Rs 10 lakhs is exempt from income tax).
The government has hiked the limits of gratuity payment from Rs 3.5 lakhs to Rs 10 lakhs. This enhanced limit is applicable to employees who retire, become incapacitated before retirement, expire or whose services were terminated on or after May 24, 2010.
As per Section 10 (10) of Income Tax Act, gratuity is paid when an employee completes five or more years of full-time service with the employer. In respect of government employees, any death-cum-retirement gratuity received under the pension rules or scheme of the central or state government, or regulations applicable to the members of defence services, is not taxable.
In case of gratuity received under the Gratuity Act, 1972, any gratuity received to the extent that it does not exceed an amount calculated in accordance with the provisions of the Gratuity Act is not taxable. The Central Board of Direct Taxes (CBDT) has issued a notification increasing the overall tax exemption to Rs 10 lakhs.
Source: The Economic Times, 13-February-2011
(Tax exemption on gratuity - The Economic Times)
14th February 2011 From India
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