Employee Resigned and Rejoined in 3 Months: Is the Gratuity We Paid Taxable?

One of our employees resigned, and we have paid him the Gratuity applicable as per the law. He has rejoined us in the same financial year after 3 months of resignation. My question is whether the Gratuity we have paid is taxable or non-taxable? If it is taxable, please quote relevant case law or section.

If the gratuity paid amount is less than 10 lakh, then it is tax-free.

Thank you, Prashantji, for your valuable inputs. But my question is, if an employee is rejoining us in the same position and company role, would the amount paid by them be taxable? I am curious to know if there is any case law where an employee receives Gratuity and rejoins in the same financial year.

Thank you, Prashantji, for your valuable inputs.

But my question is, if an employee is rejoining us in the same position and company role, would the amount paid by them be taxable? - No, please refer to the Income Tax Act.

I want to know if there is any case law where an employee receives Gratuity and then rejoins in the same financial year. - Why do you need a case law for this?

Dear Joshi,

You have already paid the Gratuity Amount. Now, you want to know whether it is taxable or not. However, the amount of Gratuity paid is not mentioned. As already posted by the Honoured member, the question of Tax does not arise up to Rs 10 Lakhs.

You have rehired the Employee, which is not an issue. But, you are mentioning that the Employee has rejoined. This joining is without continuity of service. Please treat him as a new joinee.