Serving In Pers.& Er
Please go through this information, this is according to the income tax department. May be this can help you .
Gratuity (Sec. 10(10):
(i) Any death cum retirement gratuity received by Central and State Govt. employees, Defence employees and employees in Local authority shall be exempt.
(ii) Any gratuity received by persons covered under the Payment of Gratuity Act, 1972 shall be exempt subject to following limits:-
(a) For every completed year of service or part thereof, gratuity shall be paid at the rate of fifteen days wages based on the rate of wages last drawn by the concerned employee.
(b) The amount of gratuity as calculated above shall not exceed Rs. 3,50,000(w.e.f.24.9.97).
(iii) In case of any other employee, gratuity received shall be exempt subject to the following exemptions:-
(a) Exemption shall be limited to half month salary(based on last 10 months average) for each completed year of service or Rs. 3.5 Lakhs whichever is less.
(b) Where the gratuity was received in any one or more earlier previous years also and any exemption was allowed for the same, then the exemption to be allowed during the year gets reduced to the extent of exemption already allowed, the overall limit being Rs. 3.5. Lakhs.
As per Board's letter F.No. 194/6/73-IT(A-1) dated 19.6.73, exemption in respect of gratuity is permissible even in cases of termination of employment due to resignation. The taxable portion of gratuity will quality for relief u/s 89(1 ).
Gratuity payment to a widow or other legal heirs of any employee who dies in active service shall be exempt from income tax(Circular No. 573 dated 21.8.90).
13th September 2007
It is true that as per Gratuity Act, the maximum amount of gratuity may be Rs.3,50,000/-. If any employer wants to pay more than this amount that will be treated as Ex-Gratia not as gratuity. Amount only up to Rs. 3,50,000/- will be treated as gratuity for the compliance of the Gratuity Rules.
Hope this will solve your query.
AMIT KUMAR TAWAR
13th September 2007 From India, Mundra
14th September 2007 From India, Ahmadabad
Kindly click on the following link, it will give you some required information,
Pls let me know was this information useful,,
If not let me try out more & give information,,,,
In CiteHR you will get A to Z information on HR…..
M. Peer Mohamed Sardhar
14th September 2007 From India, Coimbatore