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
1From India, New Delhi
To the extent of maximum limit of gratuity as per Payment of Gratuity Act, it is not taxable. However, any amount paid by the employer over and above Rs 10 lakhs (as per present law) will be taxable.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
Dear Ms. Madhu,
Thanks for the information.
If any organisation is giving 20 days gratuity.In this case, 5 day's amount is taxable or not??
Because only 15 days is mandatory according gratuity act.
From India, New Delhi
Thanks for the information.
If any organisation is giving 20 days gratuity.In this case, 5 day's amount is taxable or not??
Because only 15 days is mandatory according gratuity act.
From India, New Delhi
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 take expert opinion from Chartered Accountants or Financial Experts about the treatment of taxable portion of gratuity that if an employer pays gratuity @ 20 days for every completed year of service as against 15 days, will that 5 days paid in excess of what is stated in the Act be treated as taxable.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc