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Gratuity payable from 1st year onwards

This query is : Resolved 
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(Querist)
19 May 2013 Respected Experts


I have a query regarding Tax deduction from salary Is it possible that gratuity being tax exempt be deducted from the very first month of joining a company

For eg Mr A joins a company XYZ ltd with a gross salary of Rs 12 lacs PA.His basic gross salary is 40% of his gross salary which is Rs 480000 pe and gratuity is given to him at the rate of Rs 276923.08 PA. This amount of gratuity is part of his CTC of Rs 12 lacs but is exempt from IT as the limit is Rs 10L.

If it is OK to pay then should it be paid as a lump sum amount or every month as a head in the salary.

Can the organisation do this for a given employee to reduce his tax burden.


Please clarify my query. I would be much obliged


ROSHINI ARYA
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CA. RICHI SAXENA

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CA. RICHI SAXENA (Expert)
20 May 2013 The gratuity received during the period of service is Fully Taxable in each and every case.
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