Gratuity and Income Tax
This query is : Resolved
28 January 2009
A person working in a 50 Crore Private Ltd. Auto Ancillary company receives gratuity after working for 7 years will it be taxed as per Income Tax rules? If taxed at what rate? under what section?
28 January 2009
First you have to arrive at the taxable gratuity.
Taxable gratuity is calculated as below
Gratutity received
1/2 month salary for each year of completed service
Gratuity received
Rs.350000-(if earlier claimed any grautuity)
The lease of the above is allowable.
The net of gratuity received minus allowable is taxable.
It has to be added to the income of the assesse under salaries along with other salary income
First you have to arrive at the taxable gratuity.
Taxable gratuity is calculated as below
Gratutity received
1/2 month salary for each year of completed service
Gratuity received
Rs.350000-(if earlier claimed any grautuity)
The lease of the above is allowable.
The net of gratuity received minus allowable is taxable.
It has to be added to the income of the assesse under salaries along with other salary income
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