Payment of Gratuity Act, 1972

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Prapti Mukherjee (Querist)

22 March 2009 Hi! cud anyone please tell me whats the maximum amount(ceiling) of gratuity payable to an employee? Is there a ceiling of 3.5 lacs?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

22 March 2009 No ceiling as far as payment is concerned. But employee who is covered under Payment of Gratuity Act,1972 exemption u/s 10(10)of The Income tax Act,1961,is limited to Rs.3.5 lakhs among the other two conditions mentioned therein.

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)

22 March 2009 GRATUITY 10 (10) : Lumpsum amount paid by employer to employee in appreciation of past services.

AS per Gratuity act 1972It is payable if emplee has rendered service for continous period of 5 yrs .

Gratuity - In case of

1. Govt Emplyee - Fully Exempt

2. Non Govt Emplyee -

a. Covered under Payment of Gratuity Act - Least of the ollowing is Exempt

1. 350000

2. Amount Actually Recd

3. 15 / 26 * Last Drawn Salary * Completed years of Service

Completed years of Service - Eg 31.5 U should consider as 32 Yrs

SAlary = BAsic + D.A

CMA KNVV Sri Vidya - Sri Kanth

CMA KNVV Sri Vidya - Sri Kanth (Expert)

22 March 2009 B. Not Covered Under Gratuity Act ---Least of the ollowing is Exempt

1. 350000

2. Amount Actually Recd

3. 15 / 30 * 10 mths Avg Salary * Completed years of Service

Completed years of Service - Eg 31.5 U should consider as 31 Yrs

SAlary = BAsic + D.A. + % of Commision

Prapti Mukherjee

Prapti Mukherjee (Querist)

24 March 2009 Thanks a Lot Friends! :)

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