Dear All Seniors,
One of my employees is retired after working for 32 years in our company. As per the gratuity calculation, an amount of Rs. 2,307,692 is payable for gratuity. We have a LIC gratuity fund scheme in place. Is there a maximum limit for gratuity?
Kindly clarify whether we can pay this amount through the LIC scheme or if only Rs. 1,000,000 is payable, which is exempted under the Income Tax Act. To the best of my knowledge, Rs. 2,307,692 is payable, but please confirm the same.
Thank you.
From India, Mumbai
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33One of my employees is retired after working for 32 years in our company. As per the gratuity calculation, an amount of Rs. 2,307,692 is payable for gratuity. We have a LIC gratuity fund scheme in place. Is there a maximum limit for gratuity?
Kindly clarify whether we can pay this amount through the LIC scheme or if only Rs. 1,000,000 is payable, which is exempted under the Income Tax Act. To the best of my knowledge, Rs. 2,307,692 is payable, but please confirm the same.
Thank you.
From India, Mumbai
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As per PGA you are liable to pay only Upto 10 Lakh which is tax free under IT Act. Over & above it is your sole discretion but above 10 Lakh amount will be Taxable.
From India, Pune
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From India, Pune
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Please refer section 4 (3) of Gratuity Act for limit of Gratuity Payment.
From India, Pune
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From India, Pune
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Dear Mr. Farukh, Pl.follow as replied by Mr. Prasahant. Regards Ravi
From India, Mumbai
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From India, Mumbai
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Dear Mr. Farukh, Pl.follow as replied by Mr. Prasahant. V K Sharma HR, Tarapur
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There is no limit as far as Gratuity act.However,it is taxable post 10Lakhs . Do refer The payment of Gratuity Act . Regards Kasturi
From India, New Delhi
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From India, New Delhi
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I did refer to the gratuity act It very clearly says that gratuity shall not exceed rs. Ten lakhs You may check section 4 (3) of Gratuity Act
From India, Mumbai
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From India, Mumbai
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Maximum Gratuity that can be paid is Rs. 20 lakhs. If a company wants to pay more than 20 lakhs, the balance amount can be termed Ex gratia or performance bonus. As far as I can understand, the ceiling of Rs. 20 lakh applies to the aggregate of gratuity received from one or more employers in the same or different years. Beyond 20 lakhs, the amount of gratuity received is taxable.
From India, Pune
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From India, Pune
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc