Tax slab change due to gratuity received - Form 10E

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If you've received gratuity and it's impacted your tax bracket, you might be eligible for relief. This discussion clarifies that Form 10E can be used to declare taxable gratuity income in the year of retirement or even up to three years prior. This allows for potential tax savings by applying earlier tax slabs.

Awadhesh Pratap

Awadhesh Pratap (Querist)

20 June 2024 I left my organisation in April 2023 and received a gratuity from them for more than five years of service. Since the gratuity was paid is May 2023 it has got added to my current year income (FY 2023-24). After gratuity exemption under sec 10, the taxable portion of gratuity led to a tax slab change. Since gratuity is an income for past services, should it not be taxed in the earlier tax slab ? Is Form-10E applicable in my case to claim relief ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

20 June 2024 Yes.. If it is taxable in the year of retirement/receipt.
The CBDT Notification no. S.O. 1213(E), dated 8 March 2019, states that the tax exemption on gratuity to an upper limit of Rs 20 lakh is made available to employees if the employee resigns or disabled, or retires or dies on or after 29 March 2018.

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Awadhesh Pratap

Awadhesh Pratap (Querist)

20 June 2024 Thanks Sir for your response. Can you clarify one more point. Form 10 E has a section for gratuity, in which case is that applicable to claim relief on gratuity income ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

20 June 2024 you have option to declare the taxable part of it in the year of retirement or earlier 3 years , by filing form 10E.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 August 2024 Good luck.

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