I am working in US based MNC in Hyderabad, and due to business change company is planning to close there India center.
Company was withholding 4.81 % of our basic as Gratuity.
As company is closeing its india center so giveing gratutity on claulation of 4.81%basic X No of month worked in company, even employee has not served 5 year service in company.
My Questions are
1--Is Gratuity act 1972 telling anywhere that employer can't pay gratutity on less then 5 year service.
2--Is in come tax rule is telling anywhere that one is suppose to pay tax on gratutiy if employer is giveing it on less then 5 year service.
In our case are we suppose to pay tax on it or no.
Regards
Sanjay
From United States, Newbury Park
Company was withholding 4.81 % of our basic as Gratuity.
As company is closeing its india center so giveing gratutity on claulation of 4.81%basic X No of month worked in company, even employee has not served 5 year service in company.
My Questions are
1--Is Gratuity act 1972 telling anywhere that employer can't pay gratutity on less then 5 year service.
2--Is in come tax rule is telling anywhere that one is suppose to pay tax on gratutiy if employer is giveing it on less then 5 year service.
In our case are we suppose to pay tax on it or no.
Regards
Sanjay
From United States, Newbury Park
10 views no reply, dear friends plz reply. Our Employer wants to pay gratuity without tax but payroll agency wants to deduct tax. Regards
From United States, Newbury Park
From United States, Newbury Park
dear sanjay
gratuity act does not prohibit any employer to pay gratuity even before 5 years.all acts are made to follow bare minimum and any one can extend facilty for benefit to employees.
gratuity is taxable whether paid after five years or before five years and it is not taxable on supernuation
tks
j s malik
From India, Delhi
167gratuity act does not prohibit any employer to pay gratuity even before 5 years.all acts are made to follow bare minimum and any one can extend facilty for benefit to employees.
gratuity is taxable whether paid after five years or before five years and it is not taxable on supernuation
tks
j s malik
From India, Delhi
dear sorry for earlier thread ,gratuity is not taxable if paid as per gratuity act. in your case it will be taxable. tks j s malik
From India, Delhi
From India, Delhi
Dear sir ,It is not clear to us ,in our case why its not under gratuity act?
is it due to less then five year term ?
I check with my HR ,our company is under gratutiy act so why payment of it is not under act?
From United States, Newbury Park
is it due to less then five year term ?
I check with my HR ,our company is under gratutiy act so why payment of it is not under act?
From United States, Newbury Park
1. Yes the company can pay gratuity before completion of 5 years service by any or all its employees.
2. However, I am afraid the entire amount paid as gratuity before 5 years will be taxable.
Regards,
Raj
From India, Mumbai
2. However, I am afraid the entire amount paid as gratuity before 5 years will be taxable.
Regards,
Raj
From India, Mumbai
dear you are paying before five years whereas gratuity act says applicablity after five years ,you can pay but it will be taxable. tks j s malik
From India, Delhi
From India, Delhi
Gratuity paid in excess of Rs. 3,50,000 is taxable. Upto this amount it is not taxable as per the law. But in your case since you are paying the same before 5 years duration it would be taxable in the hands of the employee.
From United Kingdom
From United Kingdom
Dear All,
Gratuity paid upto Rs. 3,50,000 in life time is texempted form tax. Anything above is taxable. There is no question of whether the amount of 3.50 lacs he is getting in his first employment or others. At the joining take decalration from the employee about the gratuty amount he has received from his previous employer. It will be his responsibility to declare the authentic information.
If he has got 3.50 lacs in the previous employment and if he has got exemption on it.
Charge tax on gratuity paid by you.
Otherwise give him the benefit in your employment.
Nitin Nikam
Advocate
Gratuity paid upto Rs. 3,50,000 in life time is texempted form tax. Anything above is taxable. There is no question of whether the amount of 3.50 lacs he is getting in his first employment or others. At the joining take decalration from the employee about the gratuty amount he has received from his previous employer. It will be his responsibility to declare the authentic information.
If he has got 3.50 lacs in the previous employment and if he has got exemption on it.
Charge tax on gratuity paid by you.
Otherwise give him the benefit in your employment.
Nitin Nikam
Advocate
Actually as per ctc concept followed in most of the organisation, contribution towards the grauity is also includec while computation of the ctc. But if employees leaves the company before 5 years of service and deduction is mentioned in the ctc of the employee, company will pay the payment to the employee considered as ex gratia and it will be taxable.
Seniors please suggest if I am wrong.
regards
Mradul Bhatnagar
From India, Bhopal
Seniors please suggest if I am wrong.
regards
Mradul Bhatnagar
From India, Bhopal
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