This discussion clarifies whether income tax (IT) should be deducted from gratuity paid to an employee who has resigned after 11 years of service. Generally, no IT is deducted if gratuity is paid according to the Gratuity Act and the exemption under Section 10(10) applies. The query also touches upon who is responsible for paying gratuity on any taxable portion.
Please clarify whether IT is to be deducted from gratuity paid to an employee who has resigned from the services of the company after serving for 11 continuous years.