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Income tax on gratuity received.

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This query is : Resolved

Pradip (Querist)

09 July 2014 Dear Experts
My Auntie just retired from a PSU and received a sum of Rs. 10,00,600.00 as gratuity. Her service period was 34 completed years. At the time of retirement her Basic + DA was of Rs. 48162.00 but she received her last salary of Rs. 16054.07 (Basic + DA) for the M/O Feb 14 for 10 days only and received Rs. 48162.00 (Basic + DA) for the M/O Jan'14 . Now my question is to calculate exempt gratuity should I calculate 16054.07/26*15*34=314908.00 or 48162.00/26*15*34=944720.00. Please help me to calculate taxable gratuity.

Thanks in Advance.

CA Mohit Bansal

CA Mohit Bansal (Expert)

10 July 2014 Hi Pradip,

You have to take last 10 months average salary for computation purposes.
In your case take average of last 10 months viz., March13 to Dec13

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