23 December 2015
Dear Sir,we are the workers'co-op society ,we are covered under payment of Gratuity Act 1972.Society given the Gratuity 30 days instead of 15 days, who they are complete 20 or more years service in our society ,my query is how to treat income tax on Gratuity one of our employee resigned last week his Gratuity is about Rs.1322535/- how to calculate the income tax on this amount .please solve our problems sir.
23 December 2015
Exemption for Gratuity from tax is up to Rs.10 lakhs. So he has to add Rs.322535 with his total income and compute the tax accordingly. vide. section 10(10) of IT Act r.w.s. 4 of Payment of Gratuity Act.
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