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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2010 in case of death of an assesee ,if his wife recvz gratuity,for which there was no agreement with the employer.(to recv it).what shud be its treatment .shud it be considered as his wife's incm or what?but in girish sir's buk for pcc tax,answr is reached at if we ignore it i.e neither we include this gratuity in his incm nor wife's.

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)

11 September 2010 Dear Sir,
It has been given in Income Tax Dept. Website that:
"Death-cum-Retirement Gratuities

Section 10(10) exempts the following types of gratuities:

1. Death-cum-retirement gratuity received by a Government Servant.
2. Gratuity received by an employee under Payment of Gratuity Act, 1972.
3. Any other gratuity received by an employee or his legal heirs on retirement/termination of service, death etc. limited to 1/2 month's salary for each completed year of service calculated in the manner prescribed subject to a maximum of Rs. 3.50 lakhs."

Now, therefore it has been mentioned above that even in the hands of legal heirs there will be same computation as it has been received by the assessee himself. Therefore, gratuity amount received by legal heirs will be taxable in theirs hands.

Link for above is:
https://www.incometaxindia.gov.in/publications/7_Tax_Benefits_for_Pensioners/Chapter4.asp#Gratuities

Regards!!!
Dinesh S. Adhikari