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Tds on gratuity

Amod Ranjan (Service) (356 Points)

26 April 2017

if i am getting gratuity amount after compliting 6.5 years in a pvt. ltd. company, is it taxable on not?

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3 Replies

Riken Shah (43 Points)
Replied 26 April 2017

Mr Amod,

Amount of Gratuity exempt from tax:

1.(A) 15/26 × Last drawn salary × No of years of completed service (If your Company is covered under Payment of Gratuity ACT)

(B) ½ × Avg Monthly Salary × No of years of completed service (Ignore 0.5 years)
(In case company is not covered under Payment of Gratuity ACT)
OR

₹10 Lakhs

Whichever is Lower

Poltu Ghosh (Job) (1865 Points)
Replied 26 April 2017

the taxable portion of gratuity I.e. gratuity received minus the exemption will be added and grossed up with salary income.

ashwani arora (ca) (22 Points)
Replied 27 April 2017

Employer usualy will not give you exemption beacuse you are not getting it on retirement/death and you will start working further and earned gratuity there also and the exemption of 10L is one time only and if avail any exemption at this moment the same should be adjusted from gratuity that you might earned in future that is a little hard to keep track.