Is intermediate gratuity paid exempted from tax? Confused because it is not a retirement benefit

D Prashant
Dear All, I was associated with a proprietary firm for the last 6.5 years. I resigned in February 2019 to take up a position with another pvt ltd company.
I was paid gratuity for the period I had my services. Now my question is, is this gratuity paid exempted from tax? I am confused because it is not a retirement benefit, but I was paid the amount specifically under the head gratuity. Please help with the matter. Thanks in advance.
Regards
D Prashant
nathrao
Is your organisation covered under Payment of Gratuity Act?
If so, what is the amount of gratuity received by you?
Rule for gratuity for those covered under Payment of Gratuity Act
Last salary drawn(Basic pay+ DA)*6 years*15/26
Max exemption Rs10 lakhs.
Any amount of gratuity if received above 10lakhs will be taxable.
Another point to remember is 10 lakhs is max gratuity in your whole service/employment life from all employers put together
If you have received gratuity in the past and claimed exemption, that amount will be reduced from the amount of gratuity eligible for exemption.
So read up the rules pertaining to Gratuity and keep it clear from IT angle.
umakanthan53
Dear Prashanth,
I think that you are under the impression that gratuity is payable only on retirement after attaining the age of superannuation and this has prompted you to coin the title as " intermediate gratuity" and raise the above query. Gratuity is a one time lump sum payment payable on the termination of employment under any particular employer/establishment due to resignation, retirement, death or dismissal or disablement caused by accident or disease. Therefore no such distinction as intermediate or final gratuity.
Your service under the proprietary firm came to an end consequent on your resignation and what you were paid was the gratuity amount probably paid for your entire service of 6.5 years. As per the latest amendment the ceiling of gratuity stands at Rs.20 lakh. Income tax is leviable only when the amount of gratuity exceeds this amount; otherwise not.
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