Taxability of gratuity , paid monthly s part of ctc

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Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2014 Dear sir/ madam,
what is the tax provision if gratuity is paid to an employee , which is included as salary component.

whether the gratuity amount form part of taxable income.

if it is subject to tax, what is the backgroud of taxation.

kindly post yor valuable suggesstions...
thanks in advance..

Rupesh Jain

Rupesh Jain (Expert)

21 April 2014 gratuity may be part of CTC.
but it is not taxable every year.
normally co. pay gratuity on retirement or on death of employee. not otherwise.

if you are state or central govt employee then all amount recd. on retirement will exempt.

otherwise

minimum of following will exempt:

1. 15 days salary for every complete year or year in which do work exceed 6 month on basis of last salary drawn.

2. Rs. 10,00,000-00
3.actual recd. amount

bal. amount will taxable.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2014 thank yo sir,
gratuity been paid monthly ,then is it not taxable under the head income salaries ?

but nowadays, companies tend to include gratuity in their salary structure.... wat would be the tax treatment for this...
kindly explain sir..
thanks in advance..

Rupesh Jain

Rupesh Jain (Expert)

21 April 2014 if you are receiving the gratuity monthly then its taxable in month in which you received.

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