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gratuity payment

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(Querist)
23 February 2008 dear sir,
Employer company remits certain amounts monthly to a Trust created for the purposes of paying gratuity to retired employees. The Trust in turn remits these amounts to LIC annuity account . On each retirement , money is collected from the Trust and paid over to the Retired employee. Is the Trust liable to deduct TDS from the payments made to Company,s employee? If so at what rate ? Under which section ? On the whole amount or part of it?
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Jitender

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Jitender (Expert)
23 February 2008 in my view tds is notb applicable
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CA Saurabh Maheshwari

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CA Saurabh Maheshwari (Expert)
23 February 2008 ACTUALLY LOWER OF GRATUITY CALCULATED IS ALLOWED AS DEDUCTION FROM GRATUITY RECEIVED. LOWER OF :
1. RS.350000/-
2.ACTUAL GRATUITY RECD
3.15 DAYS AVERAGE SALARY FOR COMPLETED YEAR OF SERVICE.
IF LEFT OVER TAXABLE AMOUNT IS MORE TRUST CAN DEDUCT TDS.
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