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Applicable Income Tax for the Received Gratuity & the penalty amount

ITR 436 views 1 replies

I recently got my long pending gratuity amount from my previous employer with penalty as per the judgment given by the honorable commissioner of Labour, Chennai.

This legal battle was happening since 2013 and got the judgement in my favor in 2015. But only during last September 2024, I received the amount with partial penalty from the employer through the Revenue Recovery department, Madurai collectorate.

  • ·         My Actual gratuity amount (as of July 2012) – 4,61,538/-
  • ·         Amount Received from my Employer (in September 2024) – 10,23,078/-
  • ·         Bank interest for deposits – few thousands.

I believe that I should pay income tax for these below amounts

  • ·         for my gratuity amount
  • ·         the additional amount that I received
  • ·         the bank interest I have been getting since September 2024 (I deposited this amount for my daughter’s marriage).

Kindly advise me which section of income I should record this amount to pay the applicable income tax.

Replies (1)

Gratuity is exempt from tax upto twenty lakhs under Section 10(10). The amount received (Rs.10,23,078) is below this limit and is tax-exempt.

Any additional amount received due to the judgement and bank interest on deposits are taxable as income. eport bank interest as "Income from Other Sources" in the tax return.


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