Dear Members,
How many times can an employee receive tax exemption on gratuity?
For example, if an employee received a gratuity of 10 lakh from one employer and got an exemption, can they also receive an exemption from a second employer on gratuity?
In another scenario, if an employee received 4 lakh of gratuity from one employer, 5 lakh from a second employer, and 3 lakh from a third employer, how would they be eligible for tax exemption? The total gratuity amount is 12 lakh. Would they receive exemptions from all three employers, only the first employer, or 9 lakh from the first two employers and 1 lakh from the third?
Kindly provide your valuable comments.
Regards,
From India, Delhi
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7How many times can an employee receive tax exemption on gratuity?
For example, if an employee received a gratuity of 10 lakh from one employer and got an exemption, can they also receive an exemption from a second employer on gratuity?
In another scenario, if an employee received 4 lakh of gratuity from one employer, 5 lakh from a second employer, and 3 lakh from a third employer, how would they be eligible for tax exemption? The total gratuity amount is 12 lakh. Would they receive exemptions from all three employers, only the first employer, or 9 lakh from the first two employers and 1 lakh from the third?
Kindly provide your valuable comments.
Regards,
From India, Delhi
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Dear Friend,
A general practice employee can't receive gratuity two or more times in one financial year. To my knowledge, it is not impossible since he has to work at least one year in that particular company. Generally, companies will give gratuity after 5 years of continuous service. Some companies provide gratuity after 3 years of continuous service; it all depends on the company's policy. According to the Act, an employee is eligible after completing 5 years of service.
To my knowledge, there is a Rs. 10 Lakhs exemption in a particular financial year. For example, if an employee receives gratuity from Company X, and after a couple of years, he receives gratuity again, he is still eligible for the exemption. Note that this is happening in different financial years.
If you want an appropriate answer, please wait a little longer as our seniors will provide you with an accurate response.
I wish you all the best.
From India, Hyderabad
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A general practice employee can't receive gratuity two or more times in one financial year. To my knowledge, it is not impossible since he has to work at least one year in that particular company. Generally, companies will give gratuity after 5 years of continuous service. Some companies provide gratuity after 3 years of continuous service; it all depends on the company's policy. According to the Act, an employee is eligible after completing 5 years of service.
To my knowledge, there is a Rs. 10 Lakhs exemption in a particular financial year. For example, if an employee receives gratuity from Company X, and after a couple of years, he receives gratuity again, he is still eligible for the exemption. Note that this is happening in different financial years.
If you want an appropriate answer, please wait a little longer as our seniors will provide you with an accurate response.
I wish you all the best.
From India, Hyderabad
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Dear Telikepalli,
Thank you for sharing your knowledge. I agree with the points mentioned above. I should also clarify the length of services in each employer. However, the main question is, if someone has already qualified for the entitled length of services in each organization and has changed jobs more than three times before retirement, receiving the same amount of gratuity each time - receiving the first gratuity in 1990, the second in 2002, and the last in 2010 from three different organizations - what would be the exemption scenario?
Best Regards,
From India, Delhi
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Thank you for sharing your knowledge. I agree with the points mentioned above. I should also clarify the length of services in each employer. However, the main question is, if someone has already qualified for the entitled length of services in each organization and has changed jobs more than three times before retirement, receiving the same amount of gratuity each time - receiving the first gratuity in 1990, the second in 2002, and the last in 2010 from three different organizations - what would be the exemption scenario?
Best Regards,
From India, Delhi
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