3
There is no ceiling as per the Gratuity Act. However, the ceiling limit is in the Income Tax Act which prescribes the maximum amount that shall not be chargeable to tax.
Nowhere do both the legislations state that gratuity exceeding Rs.3,50,000/- cannot be paid.
Any amount above Rs.3,50,000/- would be chargeable to tax in the hands of the recepient.
The corporates restrict the amount payable to Rs.3,50,000/- so as to save their liability on account of Gratuity.
From India, New Delhi
Nowhere do both the legislations state that gratuity exceeding Rs.3,50,000/- cannot be paid.
Any amount above Rs.3,50,000/- would be chargeable to tax in the hands of the recepient.
The corporates restrict the amount payable to Rs.3,50,000/- so as to save their liability on account of Gratuity.
From India, New Delhi
Hi Avika
You have mistaken in saying there is no ceiling limit as per Gratuity Act.
The ceiling limit given as per Gratuity Act under Section 4 (3) states that " THE AMOUNT OF GRATUITY PAYABLE TO AN EMPLOYEE SHALL NOT EXCEED (three lakhs and fifty thousand ) RUPEES. Please go through the said Section for confirming your self and for updating.
Mohan Rao
Manager HR
From India, Visakhapatnam
You have mistaken in saying there is no ceiling limit as per Gratuity Act.
The ceiling limit given as per Gratuity Act under Section 4 (3) states that " THE AMOUNT OF GRATUITY PAYABLE TO AN EMPLOYEE SHALL NOT EXCEED (three lakhs and fifty thousand ) RUPEES. Please go through the said Section for confirming your self and for updating.
Mohan Rao
Manager HR
From India, Visakhapatnam
Dear All,
If a company has set up a Gratuity Fund under a board of trustees picked from managers of the Company and administered by the company appointed manager and the fund has a separate set of rules which are approved by the Income Tax authority, for the benefit of the employees the company may pay additional amount of gratuity over and above the ceiling ( rs 3.5 lacs) of Payment of Gratuity Act. However such additional amount are subject to Income Tax deductions.
From India, Calcutta
If a company has set up a Gratuity Fund under a board of trustees picked from managers of the Company and administered by the company appointed manager and the fund has a separate set of rules which are approved by the Income Tax authority, for the benefit of the employees the company may pay additional amount of gratuity over and above the ceiling ( rs 3.5 lacs) of Payment of Gratuity Act. However such additional amount are subject to Income Tax deductions.
From India, Calcutta
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc