How to compute the income tax on gratuity

tptamilselvan_1979 · #1 (**permalink**) 23-02-2008, 03:57 PM

Hai,

I like to know about the following queries

1. how to calcultate the tax liability on gratuity received by an government employee

2. Leave salary is taxable or not in case of government as well as private employee

please reply the answers for the above questions to

meet_gaurava · #2 (**permalink**) 04-06-2008, 07:49 PM

Dear Selvan,
Gratuity liability of an government employee is no different from the gratuity liability of private sector employee.

Calculate your gratuity amount as follows

Your gratuity amount = (Last Drawn Basic Salary + Dearness Allowance) x 15/26 x no. of years of completed service

1. If you have completed 4.8 years but less than 5 years, it can be rounded off to 5 years.
2. For every year after 5 years of completion, .5 is rounded to one. For example 5.5 years is 6 years but 5.4 years is 5 years only.

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