Our company is covered under "Payment of Gratuity Act 1972" as there are more than 20 employees. There is policy to pay Gratuity at the time of full & final payment of salary, if an employee resigns after completion of 3 years of service.
My query is about exemption of Gratuity paid after completion of 3 years of service but before 5 years.
Please advise, if we should provide exemption to employee who left the company before 5 years of service and got Gratuity payment as per company policy.
Please also let me know the section, under which it is exempted up to Rs.3.5 lakhs. As per my knowledge:- 1.Section 10(10)(i) is for Government Employees. 2.Section 10(10)(ii) is for employees covered under Payment of Gratuity Act 1972. 3.Section 10(10)(iii) is for all other employees except above two.
And maximum exemption limit is Rs.10 lakhs. Please keep in mind that this payment is before completion of 5 years.
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