Hello Friends
I need your help on the issue of applicability of Income Tax on the payment of Gratuity. I had worked in BSNL (a PSU) from 22-10-2001 to 01-09-2007 & I quit my job by resigning on dated 01-09-2007. Now I have applied for the payment of Gratuity entitled to me as per rules. The concerned department calculated the Gratuity as per details below:-
Last Pay drawn = Rs 24677-
Gratuity payment = (24677/26)*15*6 = Rs 85410- approximately
Now the Accounts Officer said to me that the payment of Gratuity is taxable so 30% tax will be deducted from the above amount during the payment. Plz clarify whether the payment of Gratuity to which I am entitled is taxable, if yes pl also throw light on the applicable section of the Income Tax Act.
My friend had also resigned from the same company but from a lower post, his amount due for Gratuity was Rs 42000- but no tax has been deducted from his amount. When I asked this from the Accounts Officer, he said that the amount of my friend was less so it was not taxable.
Please help me in clarifying how income tax is applicable on payment of Gratuity & guide me how to proceed furhter.
Thanks
Shellender Singh
I need your help on the issue of applicability of Income Tax on the payment of Gratuity. I had worked in BSNL (a PSU) from 22-10-2001 to 01-09-2007 & I quit my job by resigning on dated 01-09-2007. Now I have applied for the payment of Gratuity entitled to me as per rules. The concerned department calculated the Gratuity as per details below:-
Last Pay drawn = Rs 24677-
Gratuity payment = (24677/26)*15*6 = Rs 85410- approximately
Now the Accounts Officer said to me that the payment of Gratuity is taxable so 30% tax will be deducted from the above amount during the payment. Plz clarify whether the payment of Gratuity to which I am entitled is taxable, if yes pl also throw light on the applicable section of the Income Tax Act.
My friend had also resigned from the same company but from a lower post, his amount due for Gratuity was Rs 42000- but no tax has been deducted from his amount. When I asked this from the Accounts Officer, he said that the amount of my friend was less so it was not taxable.
Please help me in clarifying how income tax is applicable on payment of Gratuity & guide me how to proceed furhter.
Thanks
Shellender Singh