Gratuity - Pdf Download - Income Tax - CiteHR
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Dear Seniors,
Please clarify me on the following matter in regard to Gratuity payment.
1.An employee can be paid more than the ceiling limit as per act?
2. If so how much is Income tax deductible.
Please attach some Govt. Order copy for my reference.
Kunal Banerjee

Gratuity ceiling is Rs. 1000000/- Lacs. Beyond 10 lacs also can be paid depend on the employer.
Upto this Gratuity is TAX free, beyond this it would be taxable as per the IT tax slab.

Hello Kunal,
As per my knowledge
There is no limit for Paying gratuity to Employee, the ceiling limit for Exemption in Income tax at the time of retirement is 10lac Rs before retirement gratuity amount is fully taxable.
seniors request to put more lights in this point.

Hi, Retirement criteria is not there for tax deduction, IF gratuity amount exceed Rs. 10 Lac it would be tax able. Rgds/Jitender
I want to add further. If gratuity calculated as per Gratuity Act is 8 lakhs and the employer pays addition 2 lakhs under some internal scheme(total gratuity payment would be 10 lakhs) then the additional payment of 2 lakhs will attract income tax provisions. Am I right?
Hi Please refer the attachment it is not like that as you mentioned. Words Three Lacs Fifty Thousand substituted by Words Ten Lacs. Rgds/Jitender

Attached Files
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File Type: pdf Gratuity Amendment.pdf (112.0 KB, 378 views)

Dear Kunal,
Total Ceiling: Rs.10, 00,000
Tax Exemption:
• 15 days’ salary (7 days’ in case of employees of a seasonal establishment) based on salary last drawn for each year of service or part there of. (15 days’ salary*length of service).
• Rs. 10, 00, 000/-
• Gratuity actually received.

Whichever is lower.
Explanation - Gratuity Act does not limit the maximum amount that a person can receive in the form of gratuity. Payment of Gratuity Act 1972 Sec. 4 (5).

Dear all,
Gratuity payment, the term means it is a payment of gratute. Since the payment is from employer to employee, the same is legalised and
Payment of Gratuity Act came into force, as per which the maximum limit of payment is upto Rs.10 lacs.(tax free payment).
As the same is payment of gratute, there is no restriction on the part of employer for making over and above 10 lacs, but such payment
shall attract tax.
R K Nair

i Want know the all amendment of gratuity limit & calculation

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