Thereis a news item in a vernacular ( Gujarati ) news paper today indicating that Labour Ministry is proposing to enhance the limit from existing 3.5 lac for all employees other than the govt. employees to 10 lacs for which approval from Cabinet committee of Ministers is likely to be sought in next meeting of Cabinet on 9th Jan. This will bring at par all the employees including Govt. employees and there will not be any more any difference as far as gratuity is concerned between two class of employees. If so , does it mean that income tax exemption will also be automatically for max. rs. 10 lacs as in case of Govt. employees ? or it can be so only after amendment in provisions of I.T.
Can some one guide on this issue ?
From India, Mumbai
In case Gratuity Act 1972 is amended to enhance the Max limit to Rs 10 Lakhs, the amount so paid shall be fully exempt under the current Income Tax law, which states that Gratuity payble under the Gratuity act 1972 is Tax Exempt.
From India, Kanpur