Gratuity
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 February 2013
Please explain the meaning of dearness allowances.
Also the meaning of taxability gratuity received by an employee under Payment of Gratuity Act . Why is there a distinction when calculating tax liability.
Thank You
Also the meaning of taxability gratuity received by an employee under Payment of Gratuity Act . Why is there a distinction when calculating tax liability.
Thank You
CA PARAS BAFNA
(Expert)
08 February 2013
Dearness Allowance is generally given to the employees for meeting the higher and increasing cost of living.
.
Part or % of it may be considered for retirement benefits as per the service agreement between e&e.
.
Gratuity:
---------
There is a difference in a branded item and a general unbranded item. Payments made by the registered employers under the Gratuity Act are governed by the act and according to the norms set by the PG Act -contributions are made, to maintain the coherence between the Two Acts (IT & PG), such receipts are exempt. Only extra contribution results in taxable gratuity.
.
.
Part or % of it may be considered for retirement benefits as per the service agreement between e&e.
.
Gratuity:
---------
There is a difference in a branded item and a general unbranded item. Payments made by the registered employers under the Gratuity Act are governed by the act and according to the norms set by the PG Act -contributions are made, to maintain the coherence between the Two Acts (IT & PG), such receipts are exempt. Only extra contribution results in taxable gratuity.
.
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