Respected Seniors,
Wishing you all a very Happy and Prosperous New Year!
Initially, the maximum amount of gratuity payable to an employee was Rs. 3,50,000/-. Has this limit been increased? If so, could you please provide the details?
Regards,
Animesh Sarkar
From India, Vadodara
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Wishing you all a very Happy and Prosperous New Year!
Initially, the maximum amount of gratuity payable to an employee was Rs. 3,50,000/-. Has this limit been increased? If so, could you please provide the details?
Regards,
Animesh Sarkar
From India, Vadodara
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Dear Animesh,
It is still Rs. 3.5 lakhs.
With Regards,
R.N. Khola
QUOTE=animesh2001;996097]
Respected Seniors,
Wishing you all a very Happy & Prosperous New Year!
Initially, the maximum amount of gratuity payable to an employee was Rs. 3,50,000/-. Has this limit been increased? If so, could you please provide the details?
Regards,
Animesh Sarkar
[/QUOTE]
From India, Delhi
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422It is still Rs. 3.5 lakhs.
With Regards,
R.N. Khola
QUOTE=animesh2001;996097]
Respected Seniors,
Wishing you all a very Happy & Prosperous New Year!
Initially, the maximum amount of gratuity payable to an employee was Rs. 3,50,000/-. Has this limit been increased? If so, could you please provide the details?
Regards,
Animesh Sarkar
[/QUOTE]
From India, Delhi
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Hi Animesh,
The Gratuity maximum limit is still 3.5 lakhs, not yet increased. The recommendations have been made to the Finance Ministry for a limit of 10 lakhs. It has to be submitted to parliament and Rajya Sabha for enactment.
Mohan Rao Manager HR
From India, Visakhapatnam
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The Gratuity maximum limit is still 3.5 lakhs, not yet increased. The recommendations have been made to the Finance Ministry for a limit of 10 lakhs. It has to be submitted to parliament and Rajya Sabha for enactment.
Mohan Rao Manager HR
From India, Visakhapatnam
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Dear Al,
In my opinion, the Gratuity Act does not specify the limit of Rs. 3,50,000. It just provides the formula on which gratuity has to be calculated. The limit has been prescribed in the Income Tax Act. Furthermore, even the Income Tax Act does not state that we cannot pay gratuity in excess of Rs. 3,50,000.
Rs. 3,50,000 is the amount that would be exempted from tax, and any excess would be taxable in the hands of the recipient. Kindly correct me if my opinion is incorrect.
From India, New Delhi
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In my opinion, the Gratuity Act does not specify the limit of Rs. 3,50,000. It just provides the formula on which gratuity has to be calculated. The limit has been prescribed in the Income Tax Act. Furthermore, even the Income Tax Act does not state that we cannot pay gratuity in excess of Rs. 3,50,000.
Rs. 3,50,000 is the amount that would be exempted from tax, and any excess would be taxable in the hands of the recipient. Kindly correct me if my opinion is incorrect.
From India, New Delhi
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Hi, Mr.Rao is correct that recommendations are made to the Finance Ministry up to Rs.10 lacs for Gratuity. Currently it is Rs.3.5 lacs which is minimum limit for Gratuity. Regards, Pushpendra
From India, Delhi
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From India, Delhi
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User input: Well, to my knowledge, the Gratuity Act does specify the gratuity limit of 3.5 lakhs. However, an employer can pay more than that if he intends to. As per the Income Tax Act, gratuity won't be taxable up to 3.5 lakhs. But beyond that, an employer will have to pay tax on the excess amount. Seniors, please correct me if I'm wrong.
From India, New Delhi
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From India, New Delhi
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Hi, the matter to increase the limit of the gratuity is under consideration and would be possible to increase at 10 lac in coming year.
From India, Calcutta
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From India, Calcutta
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Hi,
The maximum limit for the payment of gratuity is Rs. 3,50,000/- on the completion of 5 years of service. A proposal to increase the limit up to Rs. 10,00,000/- was made in the 6th Pay Commission, and the matter was put to discussion in the Parliament of India, i.e., in the upper house (Rajya Sabha).
Wishing you all a prosperous 2101.
Thanks & Regards,
Sumit Kumar Saxena
9899669071, 0120-4131277
From India, Ghaziabad
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The maximum limit for the payment of gratuity is Rs. 3,50,000/- on the completion of 5 years of service. A proposal to increase the limit up to Rs. 10,00,000/- was made in the 6th Pay Commission, and the matter was put to discussion in the Parliament of India, i.e., in the upper house (Rajya Sabha).
Wishing you all a prosperous 2101.
Thanks & Regards,
Sumit Kumar Saxena
9899669071, 0120-4131277
From India, Ghaziabad
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Dear All,
I wish you all a very happy New Year 2010.
The Payment of Gratuity Act, 1972, applies to factories and other establishments employing 10 or more persons. On completion of five years of service, employees are entitled to payment of gratuity at the rate of 15-day wages for every completed year of service or part of it in excess of six months, subject to a maximum of Rs 3.5 lakh. To date, no amendments have been made to the existing provisions of the Act.
Gratuity shall be payable to an employee upon the termination of their employment after they have rendered continuous service for not less than five years, under the following three conditions:
(a) on their superannuation,
(b) on their retirement or resignation, or
(c) on their death or disablement due to accident or disease. Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
The calculation is done as follows: (Basic/26) * 15 * (Total number of years worked, more than 5).
Gratuity is considered income, and the employee who receives it is liable to pay taxes on it. However, gratuity up to Rs 3.5 lakh is exempt from tax under the provisions of Section 10(10) of the Income Tax Act, 1961.
Regards,
Nirmal
From India, Mumbai
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I wish you all a very happy New Year 2010.
The Payment of Gratuity Act, 1972, applies to factories and other establishments employing 10 or more persons. On completion of five years of service, employees are entitled to payment of gratuity at the rate of 15-day wages for every completed year of service or part of it in excess of six months, subject to a maximum of Rs 3.5 lakh. To date, no amendments have been made to the existing provisions of the Act.
Gratuity shall be payable to an employee upon the termination of their employment after they have rendered continuous service for not less than five years, under the following three conditions:
(a) on their superannuation,
(b) on their retirement or resignation, or
(c) on their death or disablement due to accident or disease. Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
The calculation is done as follows: (Basic/26) * 15 * (Total number of years worked, more than 5).
Gratuity is considered income, and the employee who receives it is liable to pay taxes on it. However, gratuity up to Rs 3.5 lakh is exempt from tax under the provisions of Section 10(10) of the Income Tax Act, 1961.
Regards,
Nirmal
From India, Mumbai
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Dear Gopal,
Mr. Nirmal has already provided the details on the calculation of gratuity on this thread itself. For further clarification, you can also go through section 4 of the Payment of Gratuity Act, 1972. For consideration of wages, please refer to section 2(s) of this Act.
With Regards,
R.N. Khola
From India, Delhi
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Mr. Nirmal has already provided the details on the calculation of gratuity on this thread itself. For further clarification, you can also go through section 4 of the Payment of Gratuity Act, 1972. For consideration of wages, please refer to section 2(s) of this Act.
With Regards,
R.N. Khola
From India, Delhi
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