Hi, As the maximum limit of Gratuity is 10 Lacs, Can anybody confirm that the gratuity amount is taxable under Income Tax or not? Regards Narender
From India, New Delhi
Acknowledge(0)
Amend(0)
1From India, New Delhi
Acknowledge(0)Amend(0)
To the extent of the maximum limit of gratuity as per the Payment of Gratuity Act, it is not taxable. However, any amount paid by the employer over and above Rs 10 lakhs (as per the present law) will be taxable.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Dear Ms. Madhu,
Thank you for the information.
If any organization is providing 20 days of gratuity, is the amount of 5 days taxable or not? This question arises because only 15 days are mandatory according to the Gratuity Act.
From India, New Delhi
Acknowledge(0)Amend(0)
Thank you for the information.
If any organization is providing 20 days of gratuity, is the amount of 5 days taxable or not? This question arises because only 15 days are mandatory according to the Gratuity Act.
From India, New Delhi
Acknowledge(0)Amend(0)
It is not the 5 days' wages part but the total amount in excess of Rs 10 lakhs that will become taxable. However, you can seek expert opinions from Chartered Accountants or Financial Experts about the treatment of the taxable portion of gratuity. If an employer pays gratuity at 20 days for every completed year of service as opposed to 15 days, will that additional 5 days' pay, exceeding what is stated in the Act, be treated as taxable.
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Regards,
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
Income Tax Calculator.xls