I have worked for my previous employer for 18 years and the gratuity was calculated to be 28 lakhs. However, I was told that there is a cap of 20 lakhs and the same was paid. Wanted to know if there is a way of getting the balance 8 lakhs paid as Gratuity was always shows as part of my benefits (CTC). Pl help with some reference materials. Thanks.
From Australia, Sydney
Sr.manager - Hr&admin
Ceo-usd Hr Solutions
Consulting Business


Hi, Gratuity payable upto 20 Lakhs is is tax exempted. Any amount payable over and above Rs.20,00,000/- is taxable.
From India, Madras

Gratuity as per payment of Gratuity Act , the maximum payment ceiling is 20 lakh. If any organization is paying gratuity beyond 20 lakh based on calculation basis of PG Act is taxable.

There are organizations where the gratuity is paid beyond the PG Act formula say 20 days for each completed year of service. If the gratuity amount of any employee is 18 lakhs as per organization's formula which is less than 20 lakhs, then the ITAX impact will be on the difference amount of Organization's formula vs PG Act formula though the total payment of gratuity amount is less than 20 lakh.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

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