Gratuity received by non government employee
This query is : Resolved
08 September 2025
If any gratuity is received by non government employee at the time of retirement is exempt?? If yes than how much?? Under which sec??
08 September 2025
Yes, if a non-government employee receives gratuity at the time of retirement, it is exempt from tax up to a certain limit under Indian law.
For Non-Government Employees Covered by the Payment of Gratuity Act:
The gratuity exemption is the least of the following:
15 days' salary (basic + DA) for each completed year of service,
The maximum exemption limit, currently ₹20,00,000
Actual gratuity received from the employer
The years of service are rounded to the nearest full year (6 months or more rounds up).
Full exemption applies up to the above limits; any gratuity exceeding the exempted amount is taxable.
This exemption is provided under Section 10(10) of the Income Tax Act, 1961.
For Non-Government Employees Covered by the Payment of Gratuity Act:
The gratuity exemption is the least of the following:
15 days' salary (basic + DA) for each completed year of service,
The maximum exemption limit, currently ₹20,00,000
Actual gratuity received from the employer
The years of service are rounded to the nearest full year (6 months or more rounds up).
Full exemption applies up to the above limits; any gratuity exceeding the exempted amount is taxable.
This exemption is provided under Section 10(10) of the Income Tax Act, 1961.
08 September 2025
Company has deducted tds in form 16.... They are showing gratuity of 15lacs but they have not claimed exemption .... In new scheme also it is available.????
08 September 2025
Yes, it is available even in new regime.
For Non-Government Employees Not Covered by the Payment of Gratuity Act:
The exemption is the least of the following:
Half month's average salary (basic + DA) for each completed year of service (average salary is usually calculated on the basis of the last 10 months)
A maximum exemption limit of ₹10,00,000
Actual gratuity received
This applies irrespective of the nature of permanent or temporary employment and applies if the employee has completed 5 years of service with the employer.
For Non-Government Employees Not Covered by the Payment of Gratuity Act:
The exemption is the least of the following:
Half month's average salary (basic + DA) for each completed year of service (average salary is usually calculated on the basis of the last 10 months)
A maximum exemption limit of ₹10,00,000
Actual gratuity received
This applies irrespective of the nature of permanent or temporary employment and applies if the employee has completed 5 years of service with the employer.
08 September 2025
Gratuity is recd bcz of change of job .... In new scheme in itr2 in exemption list 10(10) is written as death cum retirement gratuity recd .... He has changed job... Which option should I select??
08 September 2025
Should I show under 10(10c) amount received on voluntary retirement or termination of service???
And employer has even deducted tds on reimbursement of expenses?? How can I reduce it??
And employer has even deducted tds on reimbursement of expenses?? How can I reduce it??
08 September 2025
Consider it under voluntary retirement.
For each reimbursement you should have voucher for the relevant expense made.
For each reimbursement you should have voucher for the relevant expense made.
20 September 2025
Good Luck..
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