Gratuity not yet paid shown in form 16
This query is : Resolved
23 August 2025
I am currently employed and my employer is showing the contribution they have made to my gratuity account as a part of my gross salary and then showing exemption under section 10.
please note, no payment has been made to me for gratuity.
is this correct?
if yes, how do i show it in my ITR?
please note, no payment has been made to me for gratuity.
is this correct?
if yes, how do i show it in my ITR?
23 August 2025
Employers show the contribution as "included" in the gross, and then show it as "exempt under section 10" to clarify that this component is not actually taxable/paid out during the year, but only accrued for future payout. This is for transparency in the breakup of your salary on your pay slip/Form 16, and to avoid confusion later about taxable and exempt portions.
If gratuity has not been paid to you during the financial year (it is just accrued/allocated), you do not need to show it as income in your ITR.
Only when you actually receive gratuity (upon leaving the company or at retirement), you should:
Report the total gratuity received under the ‘Salaries’ head. Claim the exemption amount under 'Income exempt under section 10' (Section 10(10) for gratuity), based on limits/rules applicable.
If you haven’t received any gratuity payout during the FY, you do not have to show anything related to gratuity in your ITR for that year. You only need to report and claim exemption for gratuity in your ITR in the financial year in which it is actually paid out to you.
If gratuity has not been paid to you during the financial year (it is just accrued/allocated), you do not need to show it as income in your ITR.
Only when you actually receive gratuity (upon leaving the company or at retirement), you should:
Report the total gratuity received under the ‘Salaries’ head. Claim the exemption amount under 'Income exempt under section 10' (Section 10(10) for gratuity), based on limits/rules applicable.
If you haven’t received any gratuity payout during the FY, you do not have to show anything related to gratuity in your ITR for that year. You only need to report and claim exemption for gratuity in your ITR in the financial year in which it is actually paid out to you.
23 August 2025
Thank you . That resolves my query
23 August 2025
You are welcome.
22 September 2025
Good luck..
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