Dear Firends,
Thanks for your reply. Well after discussing with one or two law firm my company took decision to pay it as tax free. Law firm told them that compay can pay gratuity on less then 5 year serivice as per gratuity act 1972( Its not written in Gratutity act , that gratuity will be taxable or taxfee).
Income tax Rule 1962 say if one is getting gratuity it will be tax free up to some limit(not more then 3.5L etc etc) under income tax act its not written one should complete 5 year to get tax free gratuity.
So if company is paying any money under head of gratuity it will be tax free.But tax free limit should not more then income tax rule.
If company wants to deduct tax then they sould pay it as other earning not gratuity.
Limit of 3.5 tax free is for lifelong. So if one has taken advantage of 1 lack then in future one can take advange of max 2.5 not again 3.5
From United States, Newbury Park
Thanks for your reply. Well after discussing with one or two law firm my company took decision to pay it as tax free. Law firm told them that compay can pay gratuity on less then 5 year serivice as per gratuity act 1972( Its not written in Gratutity act , that gratuity will be taxable or taxfee).
Income tax Rule 1962 say if one is getting gratuity it will be tax free up to some limit(not more then 3.5L etc etc) under income tax act its not written one should complete 5 year to get tax free gratuity.
So if company is paying any money under head of gratuity it will be tax free.But tax free limit should not more then income tax rule.
If company wants to deduct tax then they sould pay it as other earning not gratuity.
Limit of 3.5 tax free is for lifelong. So if one has taken advantage of 1 lack then in future one can take advange of max 2.5 not again 3.5
From United States, Newbury Park
Dear Firends,
Thanks for your reply. Well after discussing with one or two law firm my company took decision to pay it as tax free. Law firm told them that compay can pay gratuity on less then 5 year serivice as per gratuity act 1972( Its not written in Gratutity act , that gratuity will be taxable or taxfee).
Income tax Rule 1962 say if one is getting gratuity it will be tax free up to some limit(not more then 3.5L etc etc) under income tax act its not written one should complete 5 year to get tax free gratuity.
So if company is paying any money under head of gratuity it will be tax free.But tax free limit should not more then income tax rule.
If company wants to deduct tax then they sould pay it as other earning not gratuity.
Limit of 3.5 tax free is for lifelong. So if one has taken advantage of 1 lack then in future one can take advange of max 2.5 not again 3.5
Regards
Sanjay
From United States, Newbury Park
Thanks for your reply. Well after discussing with one or two law firm my company took decision to pay it as tax free. Law firm told them that compay can pay gratuity on less then 5 year serivice as per gratuity act 1972( Its not written in Gratutity act , that gratuity will be taxable or taxfee).
Income tax Rule 1962 say if one is getting gratuity it will be tax free up to some limit(not more then 3.5L etc etc) under income tax act its not written one should complete 5 year to get tax free gratuity.
So if company is paying any money under head of gratuity it will be tax free.But tax free limit should not more then income tax rule.
If company wants to deduct tax then they sould pay it as other earning not gratuity.
Limit of 3.5 tax free is for lifelong. So if one has taken advantage of 1 lack then in future one can take advange of max 2.5 not again 3.5
Regards
Sanjay
From United States, Newbury Park
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
P-TAX.csv