Gratuity is taxable or not

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 ENTITY PSU,

ONE EMPLOYEE LEAVE (ON THE BASIS OF RESIGNATION) THE JOB AFTER COMPLETION OF 7 YEARS AND GRATUITY AMOUNT PAYABLE IS RS 2.50 LACS AND EMPLOYEE WILL BE JOINED IN NEXT MONTH ANOTHER PSU,
MY QUESTION IS WE DEDUCTED INCOME TAX OR TREATED AS FULLY EXEMPT UPTO 10 LACS.

Amol S Joglekar

Amol S Joglekar (Expert)
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09 September 2015 Fully exempt subject to the formula given. PSU, normally the gratuity is paid as per the Payment of Gratuity Act. And same is exempt subject to however the over all ceiling limit.

Assuming, next time when the employee resigns and gets an amount of 11 lakh as per payment of gratuity act, at that time 8.50 lakh out of the then 11 lakh would be exempt....

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