Understanding Ex-Gratia Payments: How Are They Taxed in Your CTC?

Hi,

Can anyone give details of ex-gratia taxability? In my CTC, ex-gratia payment is included.

Raviraj

Dear All,

My friend's company is paying ex gratia at 4.81% of basic salary and not providing gratuity to employees who leave after 5 years. Therefore, employees completing 5 years are receiving a lower benefit since they cannot avail themselves of the gratuity act provision of "15 days basic salary based on the last drawn salary" due to the rise in salary over 5 years.

Is it possible for employees to request management to stop the ex gratia payment per month and provide a lump sum gratuity amount upon separation? Please suggest.

Thanks and regards,