Taxability of gratuity

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Sandeep (Querist)

18 November 2014 Dear Sir/Madam,

I have one query regarding taxability of gratuity paid to resigned employee. Please find the exact details for your kind persual-
No. of years of service - 7 years
Basic - Rs.23600/-.
Actual Paid - Rs.95308/-.
Exemption Limit - Rs.350000/-.

Requesting you to please tell me the taxable and exempt amount with backup.

Thanks & Regards,

Sandeep N. Nangre.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

18 November 2014 The actual amount paid Rs.95308 is as per gratuity calculation which is fully exempt.
The calculation monthly salary*15/26*no of years of service.

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Amol S Joglekar

Amol S Joglekar (Expert)

18 November 2014 ASSUMING YOUR CASE FALLS U/S 10(10)(iii), i.e. private companies where Payment of Gratuity Act is NOT applicable.
1/2 months salary for every completed year of service is exempt.

= 23,600/2 X 7 = 82,600
(Another assumption: calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs)

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Sandeep

Sandeep (Querist)

18 November 2014 Mr.Seethraman & Amol,
Thanks for reply me immediately.

Yes, We falled under Private Company. Average of last 10 month salary is = total basic/10 = 213923/10 = 21392, in that case the gratuity paid of Rs.95308/- is exempt fully or partly and backup of the Payment of Gratuity Act applicability in various cases.

Amol S Joglekar

Amol S Joglekar (Expert)

18 November 2014 Yes. Surely. Go ahead accordingly.

Sandeep

Sandeep (Querist)

18 November 2014 Pleas send me write up or back up for Payment of Gratuity Act Applicability.

Amol S Joglekar

Amol S Joglekar (Expert)

18 November 2014 https://labour.gov.in/upload/uploadfiles/files/ActsandRules/SocitySecurity/ThePaymentofGratuityAct1972.pdf
try this link

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